The Government of India introduced Sovereign Gold Bonds (SGBs) as a safe, long-term, tax-efficient alternative to physical gold. Millions of Indians invested in SGBs based on a clear statutory promise that capital gains on redemption at maturity would be tax-free.
SGBs were designed from the beginning to be transferable, dematerialised and tradable on stock exchanges. Secondary-market purchases were fully legal, encouraged, and regulated by the Government. Market prices reflected the tax-free benefit, and investors paid significant premiums in reliance on that promise.
However, Clause 35 of the Finance Bill 2026 suddenly restricts the tax exemption only to original RBI subscribers and denies it to investors who bought SGBs from the secondary market — even if they purchased them years earlier.
This creates a serious injustice.
The Government continues to hold the same sovereign borrowing regardless of who owns the bond. Secondary-market buyers fund the Government for the remaining tenure just like original subscribers. Taxing one class of investors while exempting another, despite identical economic reality, is arbitrary and unfair.
This sudden change has already: • Destroyed market value of SGBs
• Hurt retail investors who acted in good faith
• Undermined trust in Government-issued financial instruments
We respectfully request the Government to grandfather all SGBs purchased before 1 April 2026, whether bought from RBI or the secondary market, so that their tax-free redemption is protected.
This would: ✔ Preserve investor confidence
✔ Uphold fairness and legitimate expectation
✔ Prevent unnecessary litigation
✔ Maintain trust in sovereign bonds
We are not asking for a new benefit — only protection of a promise that existed when we invested.