Interest on Gold Deposit Bonds: Exemption Under Section 10(15)(vi)
Section 10(15)(vi) of the Income-tax Act, 1961 provided an exemption for interest on qualifying gold deposit bonds issued under the Gold Deposit Scheme, 1999 or on qualifying deposit certificates issued under the Gold Monetisation Scheme, 2015, subject to the precise statutory wording and scheme conditions applicable to the relevant year.
Updated 10 October 2026. The Income-tax Act, 2025 applies from 1 April 2026. Section 10(15)(vi) is the historical reference under the 1961 Act; for tax year 2026-27 onwards, check the corresponding provision in the 2025 Act and its rules before claiming any exemption.
Meaning of Section 10(15)(vi)
Section 10 lists classes of income excluded from total income under the Income-tax Act, 1961. Clause (15) addresses interest and related receipts from specified investments. Sub-clause (vi) specifically concerns interest on certain gold deposit bonds or deposit certificates covered by the prescribed government schemes. The applicable exemption depends on the instrument and governing scheme, not merely on the investment being linked to gold.
| Eligible assessee | All categories of taxpayers, subject to ownership and the qualifying instrument or scheme terms. |
|---|---|
| Nature of income | Interest on qualifying gold deposit bonds or certificates under the schemes specified in the law. |
| Amount exempt | The qualifying interest in full, where all statutory conditions are satisfied; no general percentage-based cap is specified for this historical exemption. |
| Original scheme | Gold Deposit Scheme, 1999. |
| Other qualifying scheme | Gold Monetisation Scheme, 2015, to the extent covered by the statutory provision and applicable rules. |
Gold Deposit Scheme, 1999: how the exemption works
The Gold Deposit Scheme, 1999 was designed to mobilise privately held gold through eligible banking arrangements. A qualifying deposit or bond represented gold deposited under the scheme and could generate interest according to its terms. Where the instrument falls within Section 10(15)(vi), the interest is excluded from taxable total income for the year governed by the 1961 Act.
For example, if a qualifying gold deposit bond paid Rs 12,000 in interest during an applicable year, the entire Rs 12,000 could be exempt under the historical provision, assuming the instrument and taxpayer met the prescribed conditions. This example does not establish the tax treatment of other gold products.
Gold Monetisation Scheme, 2015 and later developments
The Gold Monetisation Scheme, 2015 introduced arrangements for depositing gold with participating banks. Tax treatment of interest on qualifying deposit certificates should be checked against the applicable version of Section 10(15)(vi), the scheme notifications and the date and category of the deposit. Government changes to scheme availability or acceptance of new deposits do not automatically determine the treatment of existing deposits; the original instrument and subsequent official instructions matter.
Before making a new deposit, confirm with the issuing bank whether the relevant scheme or deposit category is currently open and obtain the current terms. Do not assume that the historical 1999 scheme remains available for fresh investment.
Conditions and records for claiming the exemption
- Identify the qualifying instrument: Keep the original gold deposit bond, deposit certificate or bank statement specifying the relevant government scheme.
- Verify the issuer and terms: Confirm the certificate was issued under a scheme covered by the tax provision, rather than a general gold-linked savings product.
- Separate interest from other receipts: The interest exemption does not by itself settle the tax treatment of unrelated income, transfers, fees or investments.
- Match the tax year: Apply the law in force for the year in which interest is taxable or exempt, including the transition to the Income-tax Act, 2025.
- Maintain evidence: Retain interest certificates, bank records, scheme documentation and any relevant official notifications.
Is interest on all gold investments tax-free?
No. Gold deposit bonds under a qualifying notified scheme, Sovereign Gold Bonds, gold ETFs, physical gold and other gold-linked financial products are distinct instruments. Each may have separate rules governing interest, capital gains or other receipts. Section 10(15)(vi) should not be used as a blanket exemption for all gold investments.
Tax treatment from 1 April 2026
For earlier tax years governed by the Income-tax Act, 1961, Section 10(15)(vi) remains the relevant historical citation. The Income-tax Act, 2025 applies from 1 April 2026, so taxpayers should locate the corresponding exemption and review any transitional provisions, scheme notifications and rules for the applicable tax year. A previous exemption cannot be assumed solely from an old section number.
Frequently asked questions
Who could claim the historical exemption?
The historical provision was not restricted to salaried individuals. Taxpayers holding eligible instruments could claim the qualifying interest exemption, subject to the statutory and scheme conditions.
Was the full interest amount exempt?
Yes, qualifying interest was excluded in full under the historical Section 10(15)(vi), rather than being limited to a specified percentage or general rupee ceiling.
Does the exemption apply to ordinary bank fixed deposits?
No. An ordinary fixed deposit is not a qualifying gold deposit bond or certificate merely because its proceeds were used to purchase gold.
Are capital gains and interest treated the same way?
No. The provision discussed here concerns interest. Other receipts or transactions must be analysed under the separate provisions applicable to them.
Official references and related articles
- Income Tax Department: Acts, rules and notifications
- India Code: Income-tax legislation
- Reserve Bank of India: Gold Monetisation Scheme information and circulars
- Gazette of India: Government notifications
- Official income-tax e-filing portal
- Exempt income under Section 10
- Guide to tax-exempt income
This article provides general information, not individual tax advice. Check the original instrument, relevant scheme notifications and the legislation applicable to the year concerned.