Claim audit · FY 2026-27
“Sovereign Gold Bonds are completely tax-free”
The condition that decides it
Only the 8-year maturity redemption is fully exempt under section 10(47). An early sale on the exchange is a normal capital gain — 12.5% LTCG above 12 months with the ₹1.25L annual exemption under 112A, or 20% STCG within 12 months under 111A — and the 2.5% annual interest is taxable in the year received.
What the department sees
MEDIUM
Data the Income-tax Department already receives automatically — the reel doesn't mention this part.
The real math
An investor buys SGBs in the 2023 tranche at ₹6,100 per gram for 20 grams, paying ₹1,22,000, and in 2026 sells them on the exchange at ₹7,900 per gram, receiving ₹1,58,000. The gain is ₹1,58,000 minus ₹1,22,000, which is ₹36,000, and because the holding is over 12 months it is long-term under section 112A, taxed at 12.5% above the ₹1.25 lakh annual exemption — ₹0 if this is the only such gain in the year. Selling within 12 months would make it 20% STCG under section 111A, which is ₹36,000 × 20%, equal to ₹7,200. The same bonds held to the 8-year maturity would be redeemed at the prevailing gold price, and that redemption is fully exempt under section 10(47), with no capital gains at all. Meanwhile the 2.5% annual interest, about ₹3,050 on this holding, is taxable as income from other sources in each year it is credited, and because the bonds sit in Demat, the RBI deducts no TDS, so the investor must report it herself. The reel's 'completely tax-free' claim is true only at maturity; an early sale is a capital gain and the interest is income.
Questions people actually ask
There's a right way to do this
Is SGB maturity redemption tax-free?
Sections: 10(47), 112A, 111A · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims