Zerodha
SGB
Taxation
SGB tax treatment on Zerodha
SGB taxation in India has favourable treatment:
| Event | Tax |
|---|---|
| Coupon (2.5% pa, semi-annual) | Taxed as interest income at slab rate |
| Capital gain at maturity (year 8) | Exempt under Section 47(viic) |
| Premature redemption (year 5-8) | LTCG; rate per FY |
| Sale on secondary market | STCG / LTCG; rate per FY and holding |
Why maturity is special
Section 47(viic) of the Income Tax Act exempts capital gains arising on redemption of SGBs by an individual at maturity. This is the most tax-efficient way to exit.
Secondary market sale
If you sell on NSE/BSE secondary market (rather than redeem), normal capital gains apply:
- Held less than 12 months: STCG at slab rate.
- Held 12+ months: LTCG; current rate ~12.5% post FY 2024-25.
CA caveat
Tax rules change with each Finance Act. For large SGB holdings or NRI cases, consult a Chartered Accountant. This summary reflects FY 2025-26 framework.
See also
- Bid for SGBs at primary issuance
- SGB secondary market on Zerodha
- SGB redemption on Zerodha
- Redeem SGB pre-maturity on Console
- SGB premature redemption window
- SGB certificate of holding
- SGB maturity credit destination
- How funds are debited for SGB orders
- Sovereign Gold Bond
- G-Sec taxes on Zerodha
- Government Securities (G-Secs) on Zerodha
- Buy G-Sec on Zerodha
- Buy T-Bills on Zerodha
- Buy SDL on Zerodha
- SDL vs T-Bills vs G-Secs comparison
- Calculate G-Sec returns
- Maturity event for G-Secs
- Interest payment schedule for G-Secs
- Interest credit for G-Secs
- Charges for G-Sec on Zerodha
- Indicative yield on G-Secs
- Allotment time for SDL/T-bills/G-secs
- G-Sec bid cut-off times
- Zerodha bonds platform
- Tax-free bonds on Zerodha
- Reserve Bank of India
- Zerodha
- Capital gains tax in India
External references
References
- Income Tax Act 1961, Section 47(viic) (SGB maturity exemption).
- Income Tax Act 1961, Section 48 and 112 (capital gains).
- RBI, Sovereign Gold Bond Scheme, rbi.org.in.