Is SGB really tax-free?

Only the CAPITAL GAIN portion at maturity (year 8) is tax-free under Section 47(viic). The 2.5% interest is fully taxable at slab. If you sell in secondary market before maturity, capital gains are taxable (STCG at slab if 36 months post-July-2024).

Can I exit before 8 years?

Two options: (1) Redeem to RBI after 5 years on interest payment dates (early exit window). (2) Sell in secondary market on NSE/BSE any time — but liquidity is often poor and price may not reflect true gold value. Best to hold till maturity for full tax benefit.

SGB vs Gold ETF vs Physical gold?

SGB: 2.5% interest + gold price appreciation, tax-free maturity, 8-year lock-in. Gold ETF: pure gold price tracking, 12.5% LTCG post-July-2024, fully liquid. Physical gold: 3-5% making charges lost immediately, storage risk, purity risk, 20% LTCG with indexation. Ranking for pure gold investment: SGB > Gold ETF > Physical gold.

Is SGB really tax-free?

Only the CAPITAL GAIN portion at maturity (year 8) is tax-free under Section 47(viic). The 2.5% interest is fully taxable at slab. If you sell in secondary market before maturity, capital gains are taxable (STCG at slab if 36 months post-July-2024).

Can I exit before 8 years?

Two options: (1) Redeem to RBI after 5 years on interest payment dates (early exit window). (2) Sell in secondary market on NSE/BSE any time — but liquidity is often poor and price may not reflect true gold value. Best to hold till maturity for full tax benefit.

SGB vs Gold ETF vs Physical gold?

SGB: 2.5% interest + gold price appreciation, tax-free maturity, 8-year lock-in. Gold ETF: pure gold price tracking, 12.5% LTCG post-July-2024, fully liquid. Physical gold: 3-5% making charges lost immediately, storage risk, purity risk, 20% LTCG with indexation. Ranking for pure gold investment: SGB > Gold ETF > Physical gold.

Sovereign Gold Bond (SGB) Calculator

RBI-issued 8-year bonds — 2.5% p.a. interest paid semi-annually + capital appreciation on gold price. Best gold investment for Indian retail — no storage, no purity risk, tax-free capital gains.

Result

Total return after 8 years

₹135,000

Investment₹75,000
Gold value at maturity₹120,000
Capital gain (TAX-FREE at maturity)Section 47(viic) — no capital gains tax if held till maturity₹45,000
2.5% annual interest totalTaxable at slab rate₹15,000
Effective CAGR7.62%

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How to use this calculator

Enter grams of gold you plan to buy.
Enter current SGB issue price per gram.
Enter expected sell price after 8 years.
Read total return + tax-free capital gain.

About this tool

Sovereign Gold Bonds are RBI-issued 8-year bonds denominated in grams of gold. Government-guaranteed. Pay 2.5% p.a. interest (semi-annually) on the initial investment PLUS you gain from any gold price appreciation. Massive tax advantage: capital gains at maturity are TAX-FREE under Section 47(viic) of Income Tax Act — dramatically better than physical gold (20% LTCG with indexation) or gold ETF (12.5% LTCG post-July-2024). Best gold investment for Indian retail investors seeking gold exposure without storage/purity concerns. New tranches issued 4-6 times a year — subscribe via SBI/HDFC/ICICI/Zerodha at issue with 1% online discount.

Frequently asked

2.5% per annum on the INITIAL INVESTMENT amount (not on current market value). Paid semi-annually to your bank account. This interest is TAXABLE at your slab rate. Effectively, you get both interest income AND capital appreciation on gold price.

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