Official Government of India security certificate issued by the Reserve Bank of India (RBI) representing grams of gold investment with guaranteed 2.5% annual interest and tax-free redemption
Under Section 47(viic) of the Income-tax Act, capital gains arising on redemption of SGBs to an individual by the RBI after 8 years are completely exempt from income tax.
đĄ The Sovereign Gold Bond (SGB) Certificate of Holding is the official government title deed certifying your ownership of Reserve Bank of India gold bonds. Expressed in grams of 999 purity gold, it records your unique BLA (Bond Ledger Account) number, investment quantity, issue price, and maturity date. Bonds held until the full 8-year maturity enjoy 100% complete exemption from Long-Term Capital Gains (LTCG) tax.
Understanding why SGBs remain the most tax-efficient gold investment vehicle in India.
| Feature | Sovereign Gold Bonds (SGB) | Gold ETFs | Physical / Digital Gold |
|---|---|---|---|
| Annual Interest Income | 2.50% per annum paid semi-annually | Nil (0%) | Nil (0%) |
| Capital Gains Tax on Maturity | 100% Completely Tax-Free (Individuals on RBI redemption) | Taxed at 12.5% LTCG (if held over 12 months) | Taxed at 12.5% LTCG + 3% GST on purchase |
| Storage & Making Charges | Zero storage cost; 100% paperless sovereign guarantee | Expense ratio (0.5% - 0.8% annually) | Locker charges, making charges (8% - 25%), purity risk |
| Tenure / Liquidity | 8 years (early exit via RBI from year 5; tradable on exchange) | High liquidity (buy/sell anytime on stock exchange) | Sell anytime to jewelers at bid/ask spreads |
Certificate of Holding is generated by the RBI within 7 to 14 working days of the bond tranche issuance date.
100% Free of charge (investors paying online receive a âš50 per gram discount on the issue price).
Resident Indian individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions. NRIs are not eligible to purchase fresh SGBs but may hold existing bonds until maturity.
Investors holding Sovereign Gold Bonds (SGBs) seeking formal ownership proof for wealth audits, claiming bi-annual 2.5% interest payouts, exercising premature redemption after 5 years with the RBI, pledging bonds as collateral for bank loans, or converting physical bond certificates into demat format.
Log in to the net banking portal of the bank or receiving office where you applied for the bond (e.g., SBI Net Banking, HDFC NetBanking, ICICI, or SHCIL).
Go to 'e-Services' â 'Sovereign Gold Bond' or 'Investments' â 'SGB Statement'.
Select your investment tranche or enter your BLA Number and PAN.
Click 'Download Certificate of Holding'. The RBI-issued PDF contains the Government of India crest, issue date, grams held, interest payout schedule, and nominee details.
The Reserve Bank of India also sends the Certificate of Holding directly from 'sgb@rbi.org.in' to your registered email address on the tranche allotment date.
While the total tenure is 8 years, early exit is permitted through the RBI only on interest payment dates starting from the 5th year:
The RBI opens a 30-day early redemption window prior to each semi-annual interest payment date in years 5, 6, and 7.
Approach the receiving bank or submit online via Net Banking at least 10 days before the coupon payment date.
The RBI redeems the bonds based on the simple average closing price of 999 purity gold published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days. Proceeds are credited directly to your bank account.
If your bonds were allotted in physical certificate format (held in RBI's E-Kuber ledger) and you wish to trade them on stock exchanges (NSE/BSE):
Download a Demat Request Form for Government Securities (G-Sec DRF) from your stockbroker (Zerodha, Groww, etc.).
Attach a self-attested copy of your Certificate of Holding, PAN card, and Client Master Report (CMR).
Submit the physical documents to your broker. The broker coordinates with the bank/RBI to cancel the physical BLA and credit the equivalent SGB units into your demat account.
Solutions to typical operational queries regarding SGB holdings.
| Problem | Root Cause | Action to Take |
|---|---|---|
| Bi-annual 2.5% interest not credited to bank account | Bank account number and IFSC code linked to BLA | If your bank merged or IFSC changed, submit an account mandate modification letter with a cancelled cheque to the receiving bank branch. |
| Certificate of Holding not received by email | Spam folder or unverified email on application form | Log in to the bank's net banking portal where you applied, download the duplicate copy from 'e-Services', or raise a query with the bank citing your Application Reference Number. |
| Bonds not visible in demat account after allotment | DP ID and Client ID entered during application | If a mismatch occurred, RBI holds the bonds in physical BLA format. Submit a conversion request (G-Sec DRF) through your broker to pull the units into demat. |
| Lost physical Certificate of Holding | Receiving branch records | Banks are authorized to issue a duplicate Certificate of Holding upon receiving a simple written request and identity verification without requiring expensive indemnity bonds. |
Yes. Under Section 47(viic) of the Income-tax Act, 1961, capital gains arising on redemption of SGBs to an individual by the Reserve Bank of India after the full 8-year tenure (or during premature redemption in years 5, 6, and 7) are completely exempt from income tax. However, the bi-annual 2.5% interest payout is taxable as income.
Yes. SGBs are eligible to be used as collateral for loans from commercial and cooperative banks. The loan-to-value (LTV) ratio is set identically to ordinary gold jewelry loans by the Reserve Bank of India.
BLA stands for Bond Ledger Account Number. It is the master 9 or 10-digit government securities account identifier maintained in the RBI's E-Kuber system representing your specific holding.
If a nominee was registered, the nominee can claim transmission of the bonds by submitting the death certificate, identity proof, and Bank Mandate to the receiving bank. The nominee inherits the bond with all original maturity benefits, including tax-free redemption.
No. Non-Resident Indians (NRIs) are not eligible to invest in SGBs. If an Indian resident who holds SGBs subsequently becomes an NRI, they are permitted to hold the existing bonds until maturity or redemption on a non-repatriable basis.
Statutory legislation governing the issuance, holding, transfer, and redemption of Government of India securities including SGBs.
Checked on November 4, 2026
View Reference Document âStatutory tax provision conferring 100% capital gains tax exemption on redemption of SGBs by an individual.
Checked on November 4, 2026
View Reference Document â
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Issued by the Reserve Bank of India on behalf of the Government of India under the Government Securities Act, 2006. Available through scheduled commercial banks, post offices, Stock Holding Corporation of India (SHCIL), and stockbrokers.
RBI Sovereign Gold Bond Portal â