Sub category and category selection under exempted income in ITR 2 for exempted capital gain on Sovereign gold bonds

I have received the redemption amount after the 8-year maturity of my Sovereign Gold Bonds (SGB) directly into my bank account. As per income tax rules, the capital gain arising on redemption of SGBs at maturity is exempt from tax. While filing ITR-2, I need to report this amount under Schedule EI (Exempt Income). However, from the current assessment year, the Income Tax portal requires selection of a specific Category and Sub-category under “Other Exempt Income” and no option is available specifically for Sovereign Gold Bonds. The earlier facility to simply enter a description and amount is no longer available. My queries: 1)Which Category and Sub-category should be selected in Schedule EI for exempt capital gains on Sovereign Gold Bond maturity redemption? 2)If no specific option exists, what is the correct way to report this exempt income in ITR-2 without selecting an incorrect exemption category?

Thanks for the reply. In the "Exempt Income" section, it is now mandatory to select a category and sub-category before an entry can be made. Without selecting these fields, the portal does not allow the exempt income to be reported. Earlier, there was an option to manually enter a description, but that option has now been removed. 1) The exempt capital gain on redemption of Sovereign Gold Bonds is required to be reported under Exempt Income, kindly advise which category and sub-category should be selected. The available options do not include Section 47(viiic) or any option specifically relating to Sovereign Gold Bonds. 2)There is an option titled "Receipts not in nature of income" and a description box with this option.Can this option be selected for reporting the exempt capital gain on redemption of Sovereign Gold Bonds, or is there another prescribed category and sub-category that should be used? 3)Should I not report it if correct category and sub category is not available ? Kindly confirm the correct reporting method. Thank you.

Dear Querist,

For AY 2026-27, select:

Category: Other Incomes
Sub-category: Receipts not in the nature of Income
Description: “SGB maturity redemption by an individual—transaction not regarded as transfer under Section 47(viic).”

The updated ITR-2 schema specifically provides this sub-category and a description field. Do not select an unrelated Section 10 exemption.

Since redemption by an individual is not regarded as a transfer under Section 47(viic), nothing should be entered in Schedule CG. If reporting voluntarily in Schedule EI, preferably enter only the gain/accretion—redemption value minus acquisition cost—as the full redemption proceeds also include repayment of the original investment.

If this option is not visible, update the utility or reopen the return using the latest version. Do not select an incorrect category merely to complete the entry. Non-reporting is preferable to an incorrect disclosure, as Schedule EI reporting of this non-transfer is not what creates the exemption.

For a more detailed review of your case, you may book a phone consultation.

CA Shubham Goyal

Sub category and category selection under exempted income in ITR 2 for exempted capital gain on Sovereign gold bonds

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