Gold's 2025-26 Run and the NRI: How to Hold the Metal Now That SGBs Are Gone, Customs Has Tightened, and the Tax Has Moved to 12.5%

On January 29, 2026, gold touched an all-time high of about Rs 1,78,850 per 10 grams in the retail market, with MCX futures spiking near Rs 1,92,991 intraday. For an NRI sitting in Dubai or London or New Jersey watching the rupee value of family gold roughly double inside two years, the run has been a windfall on paper and a genuine planning problem in practice. The instrument most NRIs would have reached for, the Sovereign Gold Bond, no longer exists for new money. The customs rules for carrying jewellery home changed on February 2, 2026. And the tax on the paper forms of gold settled at 12.5%, but only if you get the holding period right, and the holding period is not the same across forms.

The 30-second answer: Gold ran more than 70% into early 2026 and hit roughly Rs 1,78,850 per 10 grams on January 29, 2026, driven by central-bank buying, a weaker rupee and safe-haven demand. For NRIs three things changed underneath that rally. Sovereign Gold Bonds are shut, no new tranches since February 2024 and FEMA bars NRIs from the secondary market too. Customs tightened: from February 2, 2026 an NRI abroad over a year may carry 20g (male) or 40g (female) of jewellery duty-free, bars and coins excluded. And the tax settled at 12.5% long-term without indexation, after 12 months for listed gold ETFs but 24 months for digital and physical gold, with no Rs 1.25 lakh exemption. The honest move now is paper gold through NRE or NRO, sized as a hedge, not a bet.

This is a news-analysis piece, not a buy signal. What follows is why the 2025-26 run matters specifically to an Indian living abroad, why the currency angle makes gold do something different in your hands than in a resident's, what the closure of SGBs actually took away, the customs numbers you need before you pack jewellery for a wedding, how each paper form is taxed down to the holding period that trips people up, and where I would put gold in an NRI portfolio at these prices. If you want the evergreen mechanics of each instrument, the gold investment options guide and the post-mortem on the SGB shutdown go deeper; this piece is about the moment.

Why a rally measured in rupees flatters the NRI more than the resident

Start with the thing that makes gold different for you. A resident in Mumbai earns and spends in rupees, so a rupee gold price tells the whole story. You do not. You earn in dirhams, pounds, dollars or Canadian dollars, and the rupee gold price is the product of two moving parts: the dollar price of gold and the rupee's exchange rate against the dollar.

In the 2025-26 run both parts moved the same way. Gold in dollar terms climbed on central-bank accumulation and rate-cut expectations, and the rupee weakened against the dollar over the same window. For a resident, the second part is invisible. For you it is half the point. When you remit money home and the rupee is weak, your foreign salary buys more rupees, and gold priced in those cheaper rupees has been climbing. That is a double-edged thing. The rupee weakness that inflated your gold position in rupee terms is the same weakness that erodes the rupee value of your future remittances if you ever convert back.

Here is the practical read most blogs miss: for an NRI, gold is partly a bet on gold and partly a bet against the rupee. If your liabilities are in India (a home loan, family support, a retirement you plan to spend in rupees) then rupee-denominated gold is a reasonable hedge against the rupee losing purchasing power, which is the more relevant currency for you. If your liabilities are abroad and you never intend to convert rupees back, the rupee gold price is partly a mirage; what you care about is gold in your home currency, and you should be checking the dollar or dirham or pound price, not the headline Rs 1.78 lakh number.

Put a number on it. Suppose in early 2024 you remitted the equivalent of Rs 10,00,000 and bought a gold ETF when gold was near Rs 63,000 per 10 grams. By early 2026 at roughly Rs 1,05,000 per 10 grams (a level the metal traded through on the way to its January peak), that holding is worth about Rs 16,67,000, a gain of about Rs 6,67,000 before tax. In rupee terms that looks like a 67% return. But part of that came from the rupee sliding against your home currency. If your home currency strengthened against the rupee by, say, 8% over the same period, then measured in your home currency the real return is closer to 54%, still excellent, but not the headline. The discipline is to always know which currency you are measuring in, because the answer changes whether you should be taking profit.

What the SGB shutdown actually removed, and why it stings now

For years the cleanest way for the metal to sit in a portfolio was the Sovereign Gold Bond. It paid 2.5% annual interest on top of the gold price, it tracked gold without making, storage or purity worries, and if you held it to its eight-year maturity the capital gain on redemption was fully exempt. That last feature was the quiet jewel: no other gold instrument let you capture the price appreciation tax-free.

That door is closed. The government issued its last tranche, Series IV of 2023-24, in February 2024, and confirmed through 2025 that no fresh tranches are planned. The official reasoning is debt management: with gold up more than 70% since that last issue, every bond the government had sold became a more expensive liability to redeem, and the scheme stopped being a cheap way to borrow. It had never delivered the import reduction it was meant to either. So it was wound down for new money.

For NRIs the closure stings twice. First, the obvious: NRIs were already barred from buying SGBs at issue, but those who held bonds from before they became non-resident at least had a tax-efficient gold holding to keep. Now there is no path to add to it. Second, and this is the part people get wrong, FEMA prohibits NRIs from buying SGBs even on the secondary market, where some bonds still trade among residents. So an NRI cannot replicate the SGB through the exchange. If you became non-resident holding SGBs, you may keep them to maturity or take early redemption from the fifth year, and the maturity exemption still applies to the holder, but you cannot top up. The full mechanics of what to do with an existing holding are in the SGB shutdown guide.

The replacement is not like-for-like, and it is important to be honest about that. The paper-gold routes left to an NRI are listed gold ETFs, gold fund-of-funds, and digital gold. None pays a 2.5% coupon. None gives a tax-free exit. Every one of them is a plain capital asset whose gain is taxed when you sell. So the SGB closure did not just remove an option; it removed the single most tax-efficient way an Indian could hold gold, and that genuinely changes the after-tax case for the metal at these prices.

The customs numbers you need before you pack jewellery

The other 2026 change happened at the airport. The Baggage Rules were revised and, as applied from February 2, 2026, the duty-free allowances for gold jewellery were tightened and tied explicitly to time spent abroad.

If you are of Indian origin and have stayed abroad for more than one year, you may bring gold jewellery duty-free up to 20 grams capped at Rs 50,000 in value if you are male, and up to 40 grams capped at Rs 1,00,000 if you are female. Note that both a weight cap and a value cap apply, and at 2026 prices the value cap bites first: 40 grams of gold is worth far more than Rs 1,00,000, so the practical duty-free quantity for a woman is whatever weight fits inside Rs 1,00,000 of value, which at around Rs 1,05,000 per 10 grams is under 10 grams. Read the allowance as a value allowance with a weight ceiling, not a generous 40-gram free pass.

Three hard limits matter. The allowance is for jewellery only. Gold bars and coins do not qualify for any duty-free portion and are assessed for customs from the first gram. The one-year residency condition is real: if you have been abroad less than a year, the jewellery allowance is smaller still. And the general duty-free baggage threshold for everything else (electronics, gifts) rose from Rs 50,000 to Rs 75,000 on the same date, which is a separate allowance from gold.

Put it to work on a wedding. Say you are a UAE-based NRI flying to a family wedding in Kerala carrying 100 grams of gold jewellery for the bride, worth roughly Rs 10,50,000 at early-2026 prices. As a female passenger abroad over a year, Rs 1,00,000 of that is duty-free. The remaining roughly Rs 9,50,000 of value is dutiable at the applicable customs rate on gold, which in 2026 sits in the mid-teens percent plus cess, so you should budget well over a lakh in duty and declare it at the red channel. The counterfactual that goes wrong: travellers who walk the green channel assuming family jewellery is exempt and get the lot detained. Seizure plus penalty costs far more than the duty would have. The cleaner alternative for investment-grade gold, as opposed to jewellery a family actually wants to wear, is almost always to buy paper gold inside India through your NRE or NRO account rather than physically carry metal across a border and pay both making charges abroad and duty at home.

How each paper form is taxed, and the holding period that trips people up

The 2024 Budget, effective for transfers on or after July 23, 2024, reset gold taxation to a single long-term rate of 12.5% without indexation, down from 20% with indexation. That sounds clean. It is not, because the holding period that qualifies a gain as long-term is not the same across forms, and the change to fund classification on April 1, 2025 added another layer.

Take them one at a time. A listed gold ETF, bought and sold on the NSE or BSE through a demat account, is treated like other listed securities for holding period: held for more than 12 months the gain is long-term at 12.5% without indexation; held for 12 months or less it is short-term taxed at your slab rate, which for most NRIs with meaningful Indian income is the 30% band. Digital gold and physical gold (including coins and bars) are different: they turn long-term only after 24 months, then 12.5% without indexation, and are short-term at slab rates before that. So the same two-year holding gives you a long-term rate on an ETF after one year but on digital gold only after two. People who buy digital gold thinking it is interchangeable with an ETF for tax discover the gap when they sell at 18 months and get hit at slab rates.

Gold fund-of-funds and gold mutual funds had their own scare. Under Section 50AA, certain funds were taxed entirely at slab rates with no long-term benefit. From April 1, 2025 the definition of a specified fund under Section 50AA narrowed to funds holding more than 65% in debt and money-market instruments, which pushed standard gold funds back out of that net. The result for 2026 is that a gold fund-of-funds bought and held beyond the relevant period again gets the 12.5% long-term treatment rather than pure slab taxation. If you bought a gold fund in 2024 expecting slab-rate misery, the rules moved in your favour; check the current classification before you assume.

The point that matters across all of them: none of these gets the Rs 1.25 lakh annual exemption. That exemption lives in Section 112A and covers only listed equity shares and equity-oriented mutual funds. Gold ETFs, gold funds and digital gold do not fit, so your gold gain is taxed from the first rupee, unlike your equity gain. And for an NRI, TDS under Section 195 applies on redemption, deducted on the gain by the fund house or registrar, with the usual surcharge and cess on top. The deeper mechanics of how NRI capital gains compute, including the surcharge cap and the no-basic-exemption trap, are in the capital gains guide for shares and mutual funds; gold inherits the same machinery minus the 112A exemption.

Put real numbers on the holding-period trap. Suppose you put Rs 5,00,000 into a gold ETF and another Rs 5,00,000 into digital gold on the same day in mid-2024, and both rise 40% to Rs 7,00,000 each by a point 18 months later. You sell both. The ETF, held over 12 months, is long-term: the Rs 2,00,000 gain is taxed at 12.5%, so Rs 25,000 plus cess. The digital gold, held under 24 months, is still short-term: the same Rs 2,00,000 gain is taxed at your slab rate, and at 30% that is Rs 60,000 plus surcharge and cess. Same metal, same money, same gain, and you pay roughly Rs 35,000 more purely because you held the wrong wrapper for the time you held it. Had you held the digital gold another six months to cross 24 months, you would have dropped to the 12.5% long-term rate and saved that Rs 35,000. The lesson is blunt: if you are going to hold gold on paper, the listed ETF is the more forgiving wrapper on timing, and digital gold needs a two-year commitment to be tax-efficient.

Where the answer differs by where you live

Indian tax is only half your problem. The other half is how your country of residence treats the same gold, and this is where US, UK, UAE and Canada part ways.

A UAE resident has the simplest position: the UAE levies no personal capital gains tax, so the Indian tax is the whole tax. But note the India-UAE treaty's relief on share gains does not carry over cleanly to gold ETFs in the way it does to company shares, and gold held physically or via funds is taxed in India regardless. For a Gulf NRI the practical point is that India is where the gold tax happens, so getting the Indian holding period right is the entire game.

A US resident faces the harshest overlay. The IRS treats gold and gold ETFs as collectibles, taxed at a long-term rate up to 28%, well above the 12.5% India charges, and US persons must report worldwide income, so your Indian gold gain is taxable in the US too. You claim a foreign tax credit for the Indian tax via the usual route, but the US collectibles rate is the binding number, and a US-based NRI should think hard about whether gold belongs in the Indian book at all versus a US-side holding. The PFIC overhang that bites Indian equity mutual funds for US persons can also reach certain gold funds, which is another reason a US NRI often prefers a US-listed gold vehicle.

A UK resident pays UK capital gains tax on worldwide gains if domiciled or under the post-2025 residence-based rules, and the UK does not give gold any special low rate, so the Indian 12.5% is creditable against the UK liability but the UK rate may exceed it. A Canada resident similarly reports worldwide gains and pays Canadian capital gains tax with a foreign tax credit for the Indian portion. For both, the honest framing is that holding gold in India rather than locally adds an India-side TDS and filing burden without escaping home-country tax, so the case for an Indian gold holding is strongest when you have rupee liabilities to hedge, not merely a wish to own gold.

Edge cases

Inherited gold and the cost base. If you inherit family gold, there is no tax at inheritance, but when you eventually sell, your cost is the original owner's cost (or the fair value as on April 1, 2001 for assets acquired before then), and the holding period includes the previous owner's. This matters because a lot of NRI gold is inherited jewellery, and selling it without reconstructing the original cost overstates the gain. Keep whatever purchase records the family has.

Carrying gold out, not just in. The customs rules above govern bringing gold into India. If you are an NRI taking gold out of India, declare it on the way out and keep the export certificate, because it lets you re-import the same pieces later without fresh duty. Travellers who carry jewellery out undeclared and try to bring it back get treated as importing it new.

Gold ETF dividends and the rare income distribution. Most gold ETFs are growth-only, but if a gold fund makes an income distribution, that distribution is taxed differently from the capital gain on the units, at slab rates as income. Read the scheme type before assuming everything is capital gains.

The Rs 1.25 lakh exemption confusion. Because equity LTCG and gold LTCG now share the 12.5% rate, people assume they share the Rs 1.25 lakh exemption too. They do not. That exemption is exclusive to Section 112A equity. Counting on it for gold is a common and expensive filing error.

The closing read

The honest read is that 2026 is a worse year to be reaching for gold than the headline price suggests, not because gold is overpriced (I have no edge on that, and neither does anyone quoting a Rs 2 lakh target with a straight face), but because the two features that made gold genuinely attractive for an Indian holder are gone. The Sovereign Gold Bond, the only gold instrument that paid you to hold it and let you exit tax-free, is shut to new money and barred to NRIs even secondhand. And the tax on everything that replaced it is a plain 12.5% with no equity-style exemption, applied after a holding period that quietly differs by wrapper.

So for most NRIs the recommendation is this. Treat gold as a hedge sized at roughly 5% to 10% of the portfolio, not as a trade chasing the rally, and read the asset allocation guide before you decide the number. Hold it as a listed gold ETF through your NRE or NRO account, because it is the most liquid, the cheapest to hold, and the most forgiving on the one-year holding period. Skip digital gold unless you can commit to the full 24 months, and skip carrying investment-grade metal across the border, because between making charges abroad and duty at home you lose more than the convenience is worth. Reserve physical gold for jewellery a family will actually wear, declare anything above the Rs 50,000 or Rs 1,00,000 allowance, and keep the records. The exception is the Gulf resident with rupee liabilities and no home-country capital gains tax, for whom the after-tax case for Indian gold remains the strongest of the four countries, and the US person, for whom the collectibles rate and PFIC risk argue for holding gold on the US side instead. If you are sitting on a large inherited holding or a six-figure sale, that is the point to pay a CA, not to trust a news piece, this one included.

Related guides

• Gold investment options for NRIs
• Sovereign Gold Bonds discontinued: what NRIs should do now
• NRI portfolio asset allocation
• Capital gains tax for NRIs on shares and mutual funds
• All News and analysis
• All Investments guides
• All Taxation guides

This guide is educational and general in nature. It is not individual investment or tax advice. Gold prices quoted are point-in-time market levels in early 2026 and will have moved by the time you read this; forecasts cited from banks are forecasts, not facts. Customs allowances, tax rates, holding periods and FEMA rules change, and several of the rules here changed on July 23, 2024, April 1, 2025 and February 2, 2026, so confirm your specific position with a qualified chartered accountant or customs advisor before you buy, sell or carry gold.