Sovereign Gold Bond Taxation: The 12th series of Sovereign Gold Bonds are open for investment from 1 March and investors can invest in it till 5 March. The central bank issues it to the RBI government, so it is considered a safe investment. In this, the investors get interest at a fixed rate of 2.5% on the investment and it is credited on a half-yearly basis. However, before taking any investment decision, tax must be assessed because it affects the final return. It is tax free on maturity but before that it has to pay tax on the withdrawal.
Taxation on capital gains
- The maturity period of the Sovereign Gold Bond is eight years and if you hold it till maturity, the capital gains will be tax free i.e. no tax will have to be paid on the return.
- Gold bonds can be withdrawn even before the maturity period. After five years premature withdrawal can be done. After five years, on premature redemptions, Gains will have to pay 20% tax.
- Gold bonds are listed on the stock exchange. This means that you can buy and sell it through the stock exchange. If you sell it before one year, then Gaines will be considered the income of the investor and will have to pay tax on it according to the slab. If it is sold after one year, Gaines will be considered as long term and will have to pay tax at the rate of 10 per cent on it.
- Gold bonds earn interest at the rate of 2.5 percent, which is credited to the bank account of the investor. It is fully taxable and tax is calculated according to the slab rate by adding it to the investor’s income. However, tax deducted at source (TDS) on interest paid is not applicable.
The issue price of 12th series is Rs 4662 per ten grams
For the 12th series of Sovereign Gold Bond (SGB), the government has fixed the issue price at Rs 4,662 per gram i.e. Rs 46,620 per 10 gram. At the same time, if you buy gold bonds online, then a discount of 50 rupees will also be available on every gram. The issue price for online investors is Rs 4,612 per gram i.e. Rs 46,120 per 10 gram. Investor must have PAN for SGB application. You can buy gold bonds online. Apart from this, it will also be sold through banks, Stock Holding Corporation of India Limited (SHCIL), select post offices and stock exchanges like NSE and BSE. They are not sold in Small Finance Bank and Payment Bank. In Sovereign Gold Bond Scheme, a person can buy minimum 1 gram and maximum 400 gram gold bonds in a financial year whereas HUFs will be able to invest up to 4 kg in a financial year and trusts can invest up to 20 kg in it.