Sunday, February 8, 2026

GST ITC Allegations in Assessment Proceedings: Legal Position and Resolution Framework

By CA Surekha  Ahuja 

An Authoritative Legal Framework for ASMT-10 Scrutiny, DRC-01A and SCNs under Sections 73 / 74

Input Tax Credit (ITC) related allegations arising during assessment, scrutiny under ASMT-10, or through pre-SCN and SCN proceedings constitute the single largest category of GST litigation. A consistent departmental approach has been to mechanically invoke Sections 73 or 74 of the CGST Act for alleged mismatches, excess claims, or supplier-side defaults, often without appreciating the statutory architecture of Section 16 and the settled principles governing burden of proof.

At the heart of ITC eligibility lies Section 16(2) of the CGST Act, which creates a statutory fortress. ITC entitlement crystallises if, and only if, all four conditions are cumulatively satisfied at the time of availment:

  1. Possession of a valid tax invoice or debit note;

  2. Actual receipt of goods or services;

  3. Tax charged has been paid to the Government; and

  4. Inputs or services are used in the course or furtherance of business.

Once these conditions stand satisfied contemporaneously, the statute does not impose any continuing or perpetual obligation on the recipient to police the supplier’s future compliance. Section 16(2)(c), read harmoniously with Section 155, protects bona fide taxpayers and squarely places the burden on the department to establish ineligibility, collusion, or mens rea.

The following categories represent the most litigated ITC disputes, along with the correct statutory interpretation, judicial guidance, and evidentiary standards.

ITC from Suppliers Whose GSTIN is Cancelled Retrospectively

Core Statutory Interpretation

Section 16(2)(c) provides that ITC shall not be available unless the registered person has exercised due diligence to ensure that tax has actually been paid to the Government. The expression “due diligence” must be understood with reference to the date of claim, not as an obligation of perpetual monitoring. Contemporaneous verification through GSTR-2A / 2B and payment through banking channels satisfies this requirement.

Retrospective cancellation of a supplier’s GSTIN is a consequence of departmental action against the supplier and cannot, by itself, invalidate a recipient’s vested ITC where statutory conditions stood fulfilled at the time of availment.

Paradigm Example

A registered person avails ₹2 crore ITC on purchase of TMT bars in July 2025. The supplier’s GSTIN is cancelled retrospectively in December 2025 due to non-filing of returns. An SCN proposes reversal of ITC along with interest and penalty under Section 74.

Judicial Position

  • Supreme Court – Suncraft Energy Ventures Pvt. Ltd. v. Union of India (2023)
    Once tax charged has been deposited with the Government, denial of ITC to the recipient would violate Article 265 of the Constitution. The law does not contemplate vicarious liability absent collusion or fraud.

  • Calcutta High Court – Aarna Notung Sales Pvt. Ltd. (2021)
    Reflection of invoices in GSTR-2A at the time of claim constitutes statutory due diligence. Retrospective cancellation cannot prejudice a compliant recipient.

Evidentiary Standard

  1. Tax invoice and e-way bill;

  2. Proof of payment to supplier through banking channels;

  3. GSTR-2A / 2B reflecting the invoice for the relevant period.

Once these are produced, the onus shifts entirely to the department under Section 155.

Allegations of Fake Invoices or Circular Trading (Non-receipt of Goods or Services)

Core Statutory Interpretation

Section 16(2)(b) mandates actual receipt of goods or services. The term “received” is satisfied through a complete documentary trail evidencing movement, delivery, and accounting of goods or services. Physical verification or personal supervision by the recipient is not a statutory requirement.

Paradigm Example

An SCN alleges that machinery invoices amounting to ₹50 lakh are fake on the basis that the supplier’s premises were found non-functional, despite machinery being installed and used by the recipient.

Judicial Position

  • Gujarat High Court – Bharti Airtel Ltd. v. Union of India (2023)
    Denial of ITC requires positive evidence of non-receipt. Mere doubts about the supplier or its premises are insufficient.

  • Supreme Court – VKC Footsteps India Pvt. Ltd. (2021)
    Statutory compliance through invoices, delivery documents, and accounting records establishes receipt.

Documentary Chain Establishing Receipt

Invoice → Delivery challan (Rule 55) → Transport document / LR → Goods Receipt Note → Inward register → Production or consumption records.

Departmental instructions also clarify that non-existence of supplier premises alone does not justify ITC denial where receipt is otherwise established.

GSTR-2A / GSTR-3B Mismatches due to Delayed Filing of GSTR-1 by Supplier

Core Statutory Interpretation

Post 1 January 2022, Rule 36 recognises GSTR-2B as the primary reference document. Once the supplier files GSTR-1 and pays tax, timing mismatches do not extinguish substantive ITC rights.

Paradigm Example

Supplier reports an August 2025 invoice in October 2025. Recipient claimed ITC in September 2025. A mismatch is flagged through DRC-01A.

Judicial Position

  • Supreme Court – Suncraft Energy Ventures Pvt. Ltd. (2023)
    The decisive test is whether tax has reached the Government. Procedural timing differences cannot defeat substantive entitlement.

  • Delhi High Court – Canon India Pvt. Ltd. (2021)
    Rule-based restrictions cannot override Section 16(2). Subordinate legislation must yield to the parent Act.

Reconciliation Matrix

A month-wise reconciliation demonstrating invoice value, date of GSTR-1 filing, supplier tax payment, and eventual 2B reflection conclusively addresses such disputes.

Blocked Credits under Section 17(5)

Core Statutory Interpretation

Section 17(5) is not absolute. Its provisos carve out explicit exceptions permitting ITC where goods or services are used for further supply, transportation, plant and machinery, or specified passenger vehicles.

Common Disputes

  • ITC on demo vehicles;

  • ITC on factory or business premises rent;

  • ITC on transportation and logistics vehicles.

Judicial and Administrative Guidance

  • CBIC Circular No. 151/07/2021 permits ITC on demo vehicles used for further supply.

  • Madras High Court – Matrix Cellular Services Ltd. recognises office premises rent as eligible where business nexus is established.

Evidence

Utilisation logs, sale invoices, lease agreements, utility bills, and employee transport records collectively establish business use.

Provisional ITC Reversals under Earlier Rule 36(4) Caps

Core Statutory Interpretation

Section 16(2) prevails over restrictive rules. Courts have consistently held percentage-based caps to be arbitrary and unconstitutional when they defeat substantive entitlement.

Judicial Position

  • Delhi High Court – Canon India Pvt. Ltd. (2021)

  • Karnataka High Court – LinkedIn Technology (2022)

Post-amendment jurisprudence recognises GSTR-2B as conclusive, rendering earlier provisional reversals unsustainable.

Ultimate Reply Architecture for ASMT-10, DRC-01A and SCNs

A structured reply built on the following framework has demonstrated consistently high success at the adjudication stage:

  • Demonstration of compliance with all four conditions of Section 16(2);

  • Annexure-wise documentary evidence;

  • Judicial authorities addressing the precise allegation;

  • Clear invocation of Section 155 placing burden on the department;

  • Rebuttal of Section 74 invocation in absence of suppression, fraud, or intent.

A tabular compliance matrix mapping statutory conditions to evidence and judicial authority significantly strengthens the defence.

Prayer

In the absence of any finding of collusion, suppression, or wilful misstatement, proceedings deserve to be dropped under Section 75. Mere procedural lapses or supplier-side defaults cannot attract interest or penalty where substantive compliance is established.



Tuesday, February 3, 2026

India–US Trade Agreement 2026: Economic Damage Control, Not a Trade Win

 By CA Surekha Ahuja

The India–US trade agreement announced on 2 February 2026 must be read without diplomatic filters. In economic terms, it is not liberalisation, not partnership, and not a win. It is damage control executed under tariff coercion — rational, necessary, and costly.

The 18% Tariff: A Permanent Reset, Not Relief

The deal avoids a punitive 25–50% US tariff, but replaces it with a uniform 18% duty on all Indian exports.

This is critical because:

  • India previously operated under near-zero MFN access

  • 18% becomes a structural export tax, not a temporary adjustment

  • Pricing models, margins, and long-term contracts now reset permanently

For labour-intensive exports, this is not volatility — it is institutionalised margin compression.

Russian Oil Exit: Inflation Re-Imported

India’s commitment to halt discounted Russian crude is the deal’s most inflationary consequence.

Between 2023–25, Russian oil:

  • Shielded India from global price spikes

  • Contained CPI

  • Preserved fiscal flexibility

The forced pivot to US crude and LNG structurally raises energy costs, reopening:

  • Fuel inflation risks

  • Excise-duty trade-offs

  • Input cost escalation across manufacturing

This is macro risk transferred into domestic prices.

$500 Billion Import Commitment: External Balance Stress

The headline $500 billion “Buy American” pledge is aspirational, but economically directional.

Its real implication:

  • Dilution of India’s trade surplus with the US

  • Pressure on the current account deficit

  • Greater dependence on capital flows and services exports

It narrows India’s external shock-absorption capacity.

Zero Tariff Path: Policy Inflection Point

India’s agreement to progressively remove tariffs and non-tariff barriers on US goods marks a clear departure from protection-led industrial policy.

Short-term outcome:

  • Intense competition in autos, dairy, agri, machinery

  • Cost pressure and consolidation

Long-term outcome:

  • Efficiency gains — but only for firms that survive

This is forced competitiveness, not calibrated reform.

Relative Advantage ≠ Absolute Gain

India’s only strategic upside is relative tariff positioning:

  • India: 18%

  • Vietnam / Bangladesh: ~20%

  • China: 34%

India becomes less uncompetitive, not inherently competitive.
This edge delivers results only if logistics, compliance, and scale execution follow immediately.

Final Assessment

This agreement is not a success story.
It is a rational retreat to prevent systemic export damage.

  • It buys time, not advantage

  • It embeds costs, not concessions

  • Its verdict depends entirely on post-deal execution

If India uses this window to fix cost structures, diversify markets, and scale manufacturing, history will call it realism.
If not, it will stand as an expensive concession signed under pressure.

For businesses, exporters, and advisors, one conclusion is unavoidable:

The baseline has changed. Planning must begin from here — not from the past.


Monday, February 2, 2026

Union Budget 2026: Structural Tax Reforms That Redefine Certainty

MAT Finality, TCS Rationalisation, SGB Recast and the New Income Tax Act, 2025

By Surekha Ahuja

Budget 2026: Reform Over Populism

Union Budget 2026 departs from headline-oriented announcements to deliver structural certainty. Headline tax rates remain unchanged, but amendments effective 1 April 2026 materially alter corporate taxation, overseas remittances, investment taxation, and compliance procedures.

This is not a rate-cut Budget.
It is a certainty-driven, system-strengthening Budget.

Key Amendments at a Glance

  • New Income Tax Act, 2025 notified, effective April 2026

  • MAT credit creation permanently discontinued after 31 March 2026

  • TCS rates rationalised under the Liberalised Remittance Scheme

  • Preferential tax treatment for Sovereign Gold Bonds withdrawn

  • Targeted compliance relief for small and mid-sized taxpayers

MAT Credit Blockade: Corporate Tax Finality

Amendment:

  • No MAT credit accrues for assessment years commencing on or after 1 April 2026

  • Existing credits may only be used within remaining 15-year carry-forward period

  • MAT rate fixed at 14%, final levy; 22% regime companies can utilise credits up to 25% of regular tax liability

Impact:

  • MAT is transformed from provisional to terminal tax

  • Corporates must audit legacy MAT credits and plan utilisation before expiry

Comment: Ensure internal systems reflect MAT expiry dates to avoid loss of credits.

TCS Rationalisation Under LRS: Liquidity Restoration

Amendment (Effective 1 April 2026):

  • Overseas education & medical remittances: 2% (from 5%)

  • Overseas tour packages: 5% (from 20%)

Impact:

  • Immediate cash-flow relief for families funding overseas education or medical treatment

  • TCS functions as intended: a reporting tool, not a cash-flow lock

Sovereign Gold Bonds: Arbitrage Eliminated

Amendment:

  • Interest income now taxable under “Income from Other Sources”

  • LTCG on secondary market transfers beyond 3 years taxed at 12.5% with indexation

  • Redemption at maturity: limited CG exemption; interest taxable

Impact:

  • Aligns SGBs with conventional financial instruments

  • Withdraws tax-driven arbitrage

Comment: Review SGB redemption and interest accrual timing to optimise FY27 tax impact.

New Income Tax Act, 2025: Default New Regime

Amendment:

  • Income up to ₹12 lakh fully tax-free through rebate

  • Progressive slab rates thereafter; maximum 30% for income exceeding ₹24 lakh

  • Old regime continues as limited alternative

Impact:

  • Simplifies taxation

  • Reduces dependency on exemptions

  • Provides predictable rates

Comment: Taxpayers must update internal accounting systems and payroll compliance for FY27.

Compliance Relief Measures

  • Revised returns permitted until 31 March 2027 (nominal fees)

  • One-time filing for Forms 15G/H via depository

  • Automated issuance of nil / lower TDS certificates for small taxpayers

  • TDS on manpower supply capped

  • MACT interest fully tax-free with no TDS

Compliance Timeline & Key Dates
Compliance / AmendmentAction RequiredDeadline / Effective DateComment / Clarification
MAT Credit AuditAudit existing credits, plan utilisationBefore 31 March 2026Legacy MAT credits expire if not utilised
TCS Rationalisation (LRS)Plan overseas remittances for education, medical, toursEffective 1 April 2026Align remittances with new rates
SGB HoldingsReview redemption, interest accrual, and LTCG treatmentFY27 onwardsPlan redemptions and interest realisation for tax efficiency
New IT Act FormsUpdate internal systems for filing and complianceFY27 Q1 (Apr–Jun 2026)Ensure payroll, TDS, and accounts align with new slabs
Revised ReturnsFile corrections / updatesTill 31 March 2027Covers errors, MAT credit adjustment, or SGB impact
Forms 15G/HOne-time depository filingTill 31 March 2027Simplified mechanism; must ensure correct PAN details
TDS ComplianceApply capped TDS on manpower / other provisionsFY27 onwardsReview existing agreements and payroll schedules
MACT InterestMonitor full tax-free treatmentFY27 onwardsVerify interest disbursed is correctly exempted
Corporate Audit / FilingAdjust returns for MAT finality, SGB impact, TCSFY27 compliance cycleEnsure all adjustments reflected correctly

Market Reaction vs Structural Reality

While markets reacted to unchanged slabs, the real impact lies in structural reforms:

  • ₹15,000 crore liquidity unlocked via TCS rationalisation

  • Corporate certainty restored through MAT finality

  • Litigation risk systematically reduced

This is a system-stability Budget, not a sentiment-driven one.

Final Takeaway

Union Budget 2026 is a multi-year transition blueprint:

  • Certainty over concessions

  • Finality over deferral

  • Neutrality over preference

Taxpayers: Plan in line with settled law.
Professionals: Pivot from optimisation to certainty-led compliance.

Early adaptation ensures structural benefits; delayed action increases compliance burden.

Supreme Court on GST Exports: Education Counselling to Foreign Universities Is Not an Intermediary Service

By CA Surekha Ahuja 

The intermediary controversy ends — the statute finally speaks clearly

Commissioner of Delhi GST v. Global Opportunities (P.) Ltd.

[2026] 182 taxmann.com 881 (SC)

With the dismissal of the Special Leave Petition in Commissioner of Delhi GST v. Global Opportunities (P.) Ltd., the Hon’ble Supreme Court has finally and conclusively settled the GST treatment of education counselling and admission support services provided to foreign educational institutions.

By affirming the Delhi High Court’s judgment, the Supreme Court has put to rest a recurring and misapplied departmental theory that sought to reclassify such services as “intermediary” supplies. The law now stands settled:

Education counselling services rendered to foreign universities on a principal-to-principal basis constitute export of services under the IGST Act and are eligible for zero-rating and refund with statutory interest.

This ruling restores certainty to GST export jurisprudence and realigns administrative practice with the statute as enacted.

The dispute — and why it persisted

The assessee, an education consultancy, provided counselling and admission-related services under direct contractual arrangements with foreign universities. The essential facts were undisputed:

  • Contracts existed with foreign educational institutions

  • Invoices were raised on overseas universities

  • Consideration was received in convertible foreign exchange

  • No fee was charged to students

  • GST was paid and refund claimed treating the supply as export

The refund was denied solely on the assertion that the assessee acted as an “intermediary”, on the premise that Indian students were involved in the process.

This approach consistently ignored the statutory scheme — an error now conclusively corrected.

Statutory interpretation — applied as Parliament intended

1. Recipient of service: contract and consideration prevail

Under Section 2(93) of the CGST Act, the recipient of a service is the person liable to pay consideration. In the present case, contractual privity and payment obligation rested entirely with the foreign university.

The student, though a beneficiary of the service outcome, was not the recipient in law.

Settled principle: GST recognises legal supply, not economic benefit.

2. Intermediary definition under Section 2(13), IGST Act — strictly construed

An intermediary must:

  • Arrange or facilitate a supply

  • Between two or more other persons

  • Without supplying such service on its own account

The courts correctly held that:

  • The assessee supplied services on its own account

  • There was no facilitation of a third-party supply

  • No supply existed between students and universities arranged by the assessee

Where a service provider supplies services independently to a foreign principal and receives consideration directly, the intermediary definition is statutorily excluded.

Mislabeling such services as intermediary is not interpretation — it is contradiction of the Act.

3. Place of supply governed by Section 13(2), IGST Act

Section 13(2) provides the default rule: the place of supply is the location of the recipient.

Since the recipient was located outside India, the place of supply was outside India.

Repeated attempts to substitute this rule with:

  • place of performance, or

  • location of students

were rightly rejected as legally untenable.

4. Export of services — Section 2(6), IGST Act fully satisfied

All five statutory conditions were met:

  1. Supplier located in India

  2. Recipient located outside India

  3. Place of supply outside India

  4. Consideration received in foreign exchange

  5. Supplier and recipient not merely establishments of the same person

The supply therefore qualified as export of services and was zero-rated under Section 16.

5. Refund with interest — a statutory consequence

Once zero-rating is established:

  • Refund under Section 54 of the CGST Act is a statutory entitlement

  • Interest under Section 56 follows as a matter of law, not discretion

The Supreme Court’s direction to release the refund within a specified period reinforces that delay in refund of export taxes is legally impermissible.

The law as now settled

Counselling, promotion, and liaison services provided to foreign educational institutions on a principal-to-principal basis, with direct invoicing and foreign exchange consideration, are exports of services under GST and cannot be classified as intermediary services.

This position now carries:

  • High Court reasoning

  • Supreme Court finality

There is no remaining scope for administrative deviation.

A necessary boundary: export protection depends on clean supply segregation

While the law is settled, its benefit applies only where the structure respects GST boundaries.

Key cautions for practitioners and taxpayers:

  • Do not mix supplies to foreign institutions and students

  • Services rendered directly to students must be:

    • Contractually separate

    • Separately invoiced

    • Treated as domestic taxable supplies

  • Contract language must reflect independence, not agency

  • Consideration must flow from the foreign recipient, without linkage to student fees

  • One invoice should represent one clearly identifiable supply

Courts protect exports — not hybrid or blurred arrangements.

Position before and after the Supreme Court

AspectEarlier Department ViewLaw as Settled
Nature of serviceIntermediaryExport of service
RecipientStudentForeign university
Place of supplyIndiaOutside India
Zero-ratingDeniedMandatory
RefundDiscretionaryStatutory
InterestDisputedAutomatic

Concluding note

The Supreme Court’s dismissal of the SLP in Global Opportunities restores coherence to GST export jurisprudence. It prevents denial of export benefits through artificial classification and reaffirms that GST must operate within the boundaries drawn by Parliament.

Exports are determined by statute, not perception.
Where supply, consideration, and recipient align with the law, zero-rating must follow.

For education consultancies structured correctly, the intermediary debate now stands conclusively closed.

Sunday, February 1, 2026

Budget 2026 Redefines Sovereign Gold Bonds: Exemption Now Exclusive to Primary Subscribers – A Paradigm Shift in Tax Arbitrage

 By Surekha Ahuja, Chartered Accountant & Tax Compliance Consultant

February 2, 2026 | Delhi

In a move that recalibrates the Sovereign Gold Bond (SGB) ecosystem, the Finance Bill 2026 (Clause 35) amends Section 47(1)(x) of the Income Tax Act, 1961, effective Assessment Year 2026-27 (April 1, 2026). What was once a blanket capital gains tax exemption on maturity redemption—for all holders, irrespective of acquisition route—is now ring-fenced for original individual subscribers from the Reserve Bank of India (RBI) who hold continuously till maturity (8 years).

This targeted amendment addresses a decade-long arbitrage: secondary market traders exploiting tax-free exits. For tax professionals advising MSMEs, family offices, and HNIs, the implications ripple across portfolio strategy, liquidity, and fiscal policy intent.

Legislative Anatomy: From Broad Exemption to Narrow Privilege

Under the pre-amendment regime:

  • Section 47(1)(x) deemed SGB maturity redemption a non-transfer, exempting capital gains entirely.

  • Secondary market buyers (BSE/NSE) holding till maturity mirrored primary gains—tax-free.

Post-amendment (per Budget Memorandum):

"The exemption shall be available only where the Sovereign Gold Bond is subscribed to by a subscriber at the time of original issue and is held continuously until redemption on maturity, for all Sovereign Gold Bonds issued by the RBI from time to time."

Key qualifiers:

  • Individual-only: Aligns with SGB Scheme 2015 eligibility.

  • Primary acquisition: Direct RBI subscription (not stock exchange).

  • Unbroken tenure: No interim transfers.

Secondary/redemption gains now trigger Section 45: STCG (<1 year, slab rates) or LTCG (>1 year, 12.5% sans indexation, per Budget 2024). The 2.5% p.a. interest remains taxable as "Income from Other Sources" (no TDS).

Economic Rationale: Curbing Arbitrage, Prioritizing Policy Goals

SGBs, launched November 2015, mobilized Rs. 72,274 crore across 67 tranches (~146.96 tonnes gold equivalent, RBI data). They substituted physical imports (saving ~$30-40 billion forex annually at peak), offered liquidity via secondary markets, and yielded 2.5% + gold appreciation.

The arbitrage flaw? Investors bought discounted secondary SGBs (trading at 5-10% premiums historically), held to maturity, and pocketed tax-free gains—often 10-15% annualized post-gold rally. This distorted:

  • Revenue leakage: Forgone LTCG ~Rs. 500-1,000 crore (back-of-envelope, assuming 20% secondary volume).

  • Market dynamics: Inflated secondary premiums, deterring primary uptake.

Government intent: Restore SGBs to their core—long-term gold monetization for CAD control. Data supports: Primary subscriptions dipped to <20% of volume in later tranches amid secondary tax plays.

Strategic Implications for Stakeholders

1. Original Subscribers (Winners)

  • No change: Tax-free maturity (e.g., Tranche I matures 2025—already exempt).

  • Advisory: Hold firm; ideal for family business succession (gold-linked inheritance, tax-efficient).

2. Secondary Holders/Flippers (Losers)

  • Maturity redemption now taxable. Exit strategy:

    Holding PeriodTax Treatment (Post-2026)Example (Rs. 10L investment, 12% gain)
    <1 yearSTCG @ slab (30% bracket)Rs. 1.2L gain → Rs. 36,000 tax
    >1 year to maturityLTCG @ 12.5%Rs. 1.2L gain → Rs. 15,000 tax
  • Actionable: Sell pre-maturity if unrealized gains align with slab; reinvest in Gold ETFs (similar tax) or RBI Floating Rate Bonds.

3. Broader Portfolio Impact

  • MSMEs/Family Offices: SGBs lose edge over physical gold (storage costs aside). Pivot to diversified gold ETFs or Sovereign Gold Coins for compliance ease.

  • International Tax Angle: NRIs lose appeal; DTAA credits limited for LTCG.

  • Peer Review Note: Auditors flag secondary SGBs in FY 2025-26 disclosures—reclassify as taxable assets.

Quantitative Edge Lost: Historical SGB returns (gold + 2.5%) averaged 11.5% CAGR (2015-2025). Post-tax for secondary: Nets ~9-10%, parity with ETFs.

Policy Critique: Prudent, Yet Liquidity Risks

Commendable for revenue discipline (projected Rs. 2-3 lakh crore collections, per grapevine), but secondary markets may thin—trading volumes (~Rs. 500 crore/month) could halve, hiking bid-ask spreads. Uniformity via taxation? Partial; primary bias favors institutions over retail.

Recommendation to policymakers: Grandfather existing secondary holdings or introduce partial indexation for long-haul flips.

Forward Path for Advisors and Investors

  1. Audit/Compliance: Update client ledgers; disclose secondary SGB intents in ITR-2/3.

  2. Portfolio Rebalance: Target upcoming RBI tranches (likely Q1 2026); blend with G-Secs for yield stability.

  3. Blog Takeaway: SGBs endure as sovereign havens—but for purists only. Track MCA/RBI notifications for tranche alerts.

In fiscal chess, Budget 2026 checks tax evasion without killing the golden pawn. 

Sovereign Gold Bond Taxation Snapshot (Post-Budget 2026)

Investor TypeAcquisition RouteHoldingTax Treatment
Original individual subscriberRBI (Primary)Till maturityCapital gains exempt
Secondary market buyerBSE / NSETill maturityLTCG @ 12.5%
Any investorAny< 1 yearSTCG @ slab
Any investorAny> 1 year (pre-maturity sale)LTCG @ 12.5%
All investorsAnyAnnual interest (2.5%)Taxable at slab rates

Key Change: Exemption under Section 47(1)(x) now applies only to original RBI subscribers holding continuously till maturity.