Budget 2026 makes SGBs taxable: Here are 3 investment schemes that attract zero taxes

Budget 2026 announcements: In a setback for investors, Budget 2026 imposed capital gain taxes on Sovereign Gold Bonds (SGBs) that have not been directly bought from the Reserve Bank of India (RBI), after years of the tool being celebrated as a tax-free investment.

SGBs are government securities denominated in grams of gold and are considered as substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity after eight years without paying capital gains tax till now.

Budget 2026: What changes for SGBs?

The Budget 2026 only those SGBs that have been subscribed by an individual at the time of the original issue and are held continuously until redemption on maturity after eight years will be exempt from capital gains tax.

“It is also proposed to provide that this exemption applies uniformly to all issuances of Sovereign Gold Bonds by the Reserve Bank of India,” she said.

This means that SGBs purchased from a secondary market will attract taxes.

Tax-free investments in India

While SGBs have for years been labelled as tax-free, they still attracted taxes if one redeemed them before maturity. The 2.5% interest that is earned annually is also taxable under the original rules.

However, there are a few investments in India that are truly free of any kind of capital gains tax or income tax. These investments fall under the EEE (exempt-exempt-exempt) category, meaning they do not attract income tax, taxes on interest and taxes on withdrawal.

PPF

Public Provident Fund or PPF is one of the most popular EEE investment tools in India. Investors can open a PPF account with their banks or post office with a minimum investment of ₹500 and a maximum of ₹1.5 lakh per year. PPF investments have a lock-in period of 15 years and can be extended in five-year windows.

Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana (SSY) was launched by the Centre under its ‘Beti bachao, Beti padhao’ campaign and is meant for securing the future for the girl child. Under the scheme, parents of a girl child below 10 years can open an account to save for her education and marriage. It offers one of the highest interest rates among small savings schemes.

EPF investment

Employees Provident Fund or EPF investment is another widely used investment tool that falls under the EEE category. All companies in India with more than 20 employees are required to open an EPF account for the employees, wherein both parties contribute some amount monthly. The employer has to match the employee contribution, which are saved under retirement funds. PF money can be withdrawn in certain other occasions as well including marriage.

Other than these, certain ULIPs and ELSS schemes also fall under EEE investments.