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Sovereign bondd

Madhavan R (88 Points)

25 August 2022

sale of Sovereign Gold bonds:: is it exempt from Capital gains tax on long or short term period of redemption

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6 Replies

Mahesh Shah (2308 Points)
Replied 26 August 2022

Lock in period 5 yrs....sale after 5 yrs and before maturity will attract LTCG....on maturity tax free

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 26 August 2022

No short term, only if redeemed at maturity i.e. after 8 years, by any INDIVIDUAL, capital gain is exempted. Yes, premature encashment after 5 years is allowed.

Mahesh Shah (2308 Points)
Replied 26 August 2022

@ Dhirajlal sir, after lock in period of 5 yrs one can make application to pre mature on intreast payment date befor maturity and that is taxable as capital gains ( LTCG)

Since I have those bonds I am aware, sir

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 26 August 2022

Yes, but 5 yrs period is not under short term...

Mahesh Shah (2308 Points)
Replied 26 August 2022

Sir, one can not sell before 5 years so obviously it will be LTCG if sold before maturity and after lock in period of 5 yrs

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Samantha J (1236 Points)
Replied 28 August 2022

SGB on redemption on coupon payment dates after five years are exempt from LTCG.But the sad part is that if one holds it in demat form one cannot opt for redemption before maturity as brokers don't have this option on the trading platform!
RBI and SEBI toss the issue between them each saying that the other has to ensure compliance to notification!
Jai Ho!
Let's be practical and not theoretical !