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Inflation May 2026 · 10 min read

Sovereign Gold Bonds (SGB) vs Digital Gold vs Gold ETFs: Which Yields Most?

R

Renjith Pillai

Senior Systems Architect & Financial Analyst

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Gold is a traditional inflation hedge in Indian households. However, buying physical jewelry involves high making charges (10-25%) and GST, making digital paper gold formats vastly superior.

Why Sovereign Gold Bonds (SGB) Win on Tax & Yield

SGBs issued by the Reserve Bank of India (RBI) pay 2.5% per annum interest credited semi-annually. More importantly, capital gains on SGBs held to 8-year maturity are 100% exempt from capital gains tax!

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Frequently Asked Questions

Can I sell Sovereign Gold Bonds before 8 years?+
Yes, SGBs trade on stock exchanges (NSE/BSE) after issuance, or can be prematurely redeemed with RBI after 5 years.
What is the GST rate on buying physical gold vs SGB?+
Physical gold and digital gold attract 3% GST plus making charges. SGBs have zero GST and zero making charges.

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R

Renjith Pillai

Senior Software Engineer & Network Specialist

Renjith Pillai is a senior software engineer and financial tools author with over 12 years of experience. He built EasyCalcs.in to provide high-precision, privacy-first technical tools and financial calculators for investors, engineers, and consumers.