Can NRIs Invest in Gold Bonds?

When it comes to long-term wealth creation, gold has always held a special place in every Indian household. But for NRIs who want to invest in gold without worrying about physical storage or purity, Sovereign Gold Bonds (SGBs) often seem like the perfect option.
However, there’s always confusion around one big question:

Can NRIs invest in Gold Bonds today?

The short answer is: NRIs cannot make fresh investments in new SGB issuances, but they can continue holding existing bonds and even repurchase/sell them under specific conditions.

⭐ Are NRIs Allowed to Invest in Sovereign Gold Bonds?

Under current RBI guidelines:

❌ NRIs cannot subscribe to new SGB issuances.

If you currently live abroad and qualify as an NRI or OCI, you cannot apply for freshly issued SGBs through banks, post offices, brokers, or online platforms.

✔️ NRIs can continue holding SGBs purchased before becoming NRI.

If you bought SGBs while you were a resident Indian and later moved abroad, you are allowed to:

• Hold them until maturity
• Redeem them on maturity
• Sell them on stock exchanges (if the tranche is listed)

This is permitted under FEMA (Foreign Exchange Management Act) provisions.

✔️ NRIs can get SGBs via inheritance or gifts.

If you inherit SGBs from parents/grandparents or receive them as a gift, you can legally hold and redeem them even as an NRI.

⭐ Why SGBs Still Make Sense for NRIs Who Hold Them

If you already own SGBs (or receive them through inheritance), here’s why they remain an excellent investment:

📈 1. You earn 2.5% annual interest

This interest is paid directly into your bank account every six months.

💰 2. Capital gains on redemption are tax-free

When you redeem SGBs at maturity (8 years), the capital gains are fully exempt from tax for all investors, including NRIs.

🛡️ 3. No storage risk, no making charges

You get gold-linked returns without dealing with lockers or purity worries.

🔁 4. Tradable on stock exchanges

Listed SGBs can be bought and sold on NSE/BSE like any other security.

⭐ Can NRIs Sell SGBs in India?

NRIs who legally hold SGBs can:

• Sell them on stock exchanges, or
• Redeem at maturity

The sale proceeds must be credited to an NRO account, as they are considered “non-repatriable” unless specific conditions for repatriation are met.

⭐ Tax Rules for NRIs on Gold Bonds

Here’s a quick snapshot:

Event	Tax Treatment for NRIs
Interest Income (2.5%)	Fully taxable in India (added to income)
Capital Gains on Maturity	Exempt from tax
Capital Gains on Sale (Before Maturity)	LTCG @ 20% with indexation, STCG added to income
TDS	Generally applicable on interest if PAN not linked

Tax rules may vary, so NRIs usually consult a financial advisor.
Platforms like JM Financial Services can guide investors on taxation, redemption, and wealth-planning strategies involving gold investments.

⭐ Alternative Gold Investment Options for NRIs

Since NRIs cannot buy new SGBs, here are practical alternatives:

🟡 1. Gold ETFs (India or International)

If you have an NRO/NRE demat + trading account (subject to rules), Gold ETFs are a good proxy.

🟡 2. Mutual Funds with Gold Exposure

Several Indian mutual funds offer gold fund-of-funds.

🟡 3. Physical Gold (local regulations apply)

NRIs can buy physical gold in India, subject to customs rules.

🟡 4. Digital Gold

Allowed only in some countries—not regulated in India.

Conclusion

While NRIs cannot invest in new issues of Sovereign Gold Bonds, they can continue holding or redeeming previously purchased SGBs and also benefit from them through inheritance.
Given the tax efficiency, safety, and returns that SGBs offer, they remain an attractive part of long-term wealth planning for NRIs.

If you're evaluating gold investment options or need clarity on NRI taxation and compliance, you can explore expert support through JM Financial Services, which provides guidance on NRI portfolios, gold investment strategies, and wealth management.

FAQs

1. Can NRIs buy fresh Sovereign Gold Bonds today?

No. NRIs cannot subscribe to new SGB issuances under RBI rules.

2. Can NRIs hold SGBs bought before they became NRI?

Yes. They can hold them until maturity and redeem them normally.

3. Is the interest earned on SGB taxable for NRIs?

Yes. The 2.5% annual interest is taxable in India.

4. Are capital gains exempt for NRIs?

If redeemed on maturity, capital gains are tax-free.

5. Can NRIs sell SGBs on exchanges?

Yes, provided the tranche is listed. Proceeds go to the NRO account.

6. Can NRIs receive SGBs as a gift or inheritance?

Absolutely. NRIs can legally hold, redeem, and benefit from inherited SGBs.