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Sovereign Gold Bonds 2024, SGB Series-IV: How are SGBs taxed? Is there tax on interest? Are capital gains exempted?

BY Amirul

February 16, 2024
8:59 pm

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Sovereign Gold Bonds 2024, SGB Collection-IV: Friday (February 16, 2024) was the final day to spend money on Sovereign Gold Bonds 2024, SGB Collection-IV. Sovereign Gold Bonds (SGBs) are standard amongst buyers who do not need to buy gold in its bodily kind or need it in each varieties. Since bonds are issued by the Reserve Financial institution of India (RBI) and made obtainable by banks, monetary establishments, and put up workplaces, folks purchase SGBs as they discover them a dependable funding choice. By SGBs, the federal government gives 99.9 per cent pure gold of 24 carats within the type of bonds. In SGB Collection-IV, the speed of gold was stored at Rs 6,263 per gramme.

Whereas bodily gold that you simply buy at present is bought on the ongoing market value, SGBs present an additional benefit of two.5 per cent annual curiosity in your funding.

The maturity interval of a SGB is eight years, and also you promote the bond at gold’s ongoing market price as determined by the federal government.

So, one will get curiosity plus redemption on an SGB funding.

However like most sorts of earnings, earnings from SGBs are additionally taxed.

Are you aware how?

Do you pay tax solely on curiosity, or are capital features on the time of bond maturity additionally taxed?

Do you additionally must pay TDS in your earnings? Know what RBI guidelines say in regards to the tax on SGBs.

Sovereign Gold Bonds 2024, SGB Collection-IV: Tax implications on curiosity

As per the RBI, curiosity on SGBs will likely be taxable as per the provisions of the Revenue-tax Act, 1961 (43 of 1961).

It means you may be taxed as per your tax slabs, and there will likely be no tax exemption on curiosity earnings.

Sovereign Gold Bonds 2024, SGB Collection-IV: Tax implications on capital features

In contrast to tax on curiosity earnings from SGBs, capital features tax arising on the redemption of SGBs to a person has been exempt.

As per the RBI rule, indexation advantages will likely be offered to long-term capital features arising to any particular person on the switch of a SGB.