Nirmala Sitharaman, Union Finance Minister, at an interaction with businessline in New Delhi. | Photo Credit: By special arrangement

Finance Minister Nirmala Sitharaman firmly defended the new taxation regime for Sovereign Gold Bonds and the increased Securities Transaction Tax on Futures & Options (F&O) on Tuesday.

In her first post-budget interview with businessline, the Finance Minister explained that Sovereign Gold Bonds (SGBs) were designed for long-term investors. She said those who hold them until maturity, as originally intended, will continue to enjoy the promised tax-free benefits. “But you went through a secondary market and then you are making a killing. Why shouldn’t I get something? And you’re not even holding it for maturity. Even if you hold it for maturity, you pick it up from somewhere else (Secondary Market). So I’m placing a bit of a premium on it,” she said.

Taxation Scenarios

As proposed in the Finance Bill, there would be four scenarios for taxation of SGB. If one is subscribed at the time of the launch of any tranche and redeemed at maturity (8 years), there will be no tax. Second, if one buys SGB units in the secondary market and holds them till maturity, the capital gain will be taxable. Third, if someone buys from and sells in the secondary market, capital gains will be taxed. Fourth, if someone enters at the time of launch and redeems after five years but before maturity, the capital gain will be taxed.

Gold Transition

SGB was launched in 2015 to provide an option for shifting from physical gold to paper gold. Between 2015 and 2024, a total of 67 tranches were launched, and units worth 147 tonnes of gold were bought. With gold prices rising, it became unviable for the government to bring in any tranche after 2024. However, it has become very attractive in the secondary market.

STT Hike

Meanwhile, on the issue of higher STT for F&O, Sitharaman said: “We are not touching STT in general. We are touching only futures and options. And that is where we are getting continuously, people calling us to say people are losing money. And who are the ones losing money who normally don’t have that kind of a spare cash to speculate? So is the government supposed to sit and watch? We want to do what can help in deterring people from getting there,” she said, justifying the move.

Investor Protection

She said the government wants to deter people from losing money. “Of course, the market regulators will take care of other things which they have to do. We have not touched every cash transaction. I think the market will understand our intent and as to why we have done it. And it is not some sweeping brush across the board,” she said.

Budget Proposal

The Finance Minister had proposed, in the Union Budget, to raise STT on both futures and options by up to 150 per cent. STT on Futures has been raised to 0.05 per cent from 0.02 per cent earlier, and for options has been raised to 0.15 per cent from the previous 0.1 per cent. The STT hike on futures is 150 per cent, and on options, it is 50 per cent.

Published on February 2, 2026