India is set to implement a substantial change regarding tax exemptions on gold starting from April 1. The new rule affects transactions in the secondary market under the Sovereign Gold Bond scheme (SGB), where previously investors were exempt from capital gains tax upon maturity. This change, introduced in the recent budget, means that any transactions in the secondary market after the bond has matured will incur capital gains tax, impacting both existing and new investors in gold bonds.

Chartered Accountant Nitin Kaushik clarified that from April 2026, only those investors who subscribed directly through the Reserve Bank of India (RBI) during the primary issue and held the bonds until maturity will be tax-exempt. For those who did not acquire the bonds through the primary issuance, the government will impose taxes on price gains at maturity. This revision effectively distinguishes between two types of investors in the gold bond scheme, altering the investment landscape significantly.

This change could cause a shift in investor behavior, as those purchasing from the secondary market may reconsider their strategies in light of potential tax liabilities. Investors now need to be more vigilant about the channels through which they acquire gold assets and the subsequent tax implications of their transactions. The changes could lead to a decrease in secondary market transactions as investors weigh the tax burdens against the benefits of investing in gold bonds.