Sovereign Gold Bond: Most of the people in the country are preferring to invest in gold. In such a situation, if you also want to take good profits by investing in gold, then there is a chance for you to buy gold under the Sovereign Gold Bond scheme. We are giving you information about the tax on gold in this.
get so much interest
Investing in gold is considered to be safer than other investments. In this, you get an interest of 2.5 percent every year. Sovereign Gold Bond is a type of government security, which is issued by the Reserve Bank of India on behalf of the government. These are sold to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charities.
1 gram gold investment
Let us tell you that you can invest at least one gram of gold in Sovereign Gold Bond. Any individual and Hindu Undivided Family can buy gold bonds up to a maximum value of 4 kg. The maximum purchase limit for trusts and similar entities is 20 kg.
how is tax
Investors get a fixed interest every year on Sovereign Gold Bond (SGB). Its rate of interest is fixed at 2.5 percent per annum. This interest comes under the taxable income under the Income Tax Act, 1961. Interest earned from gold bonds in a financial year The interest earned on gold bonds is counted in the income of the taxpayer from other sources. Tax on this is levied on the basis of which income tax slab the taxpayer falls in. However, there is no TDS on the interest earned from gold bonds.
The maturity period of Sovereign Gold Bond is 8 years. The return received by the customer after the completion of 8 years will be completely tax free. However, this is a special tax benefit introduced by the government to make bonds more attractive and encourage more investors to shift from physical gold to non-physical gold. There are two ways of premature exit from this bond. Doing so attracts different tax rates on the returns of the bond.
what are long term
Generally, the lock-in period of Sovereign Gold Bond is 5 years. The returns from the sale of gold bonds after the completion of this period and before the completion of the maturity period, are kept in the Long Term Capital Gains. The long term capital gains tax rate has been 20 per cent with added cess and indexation benefits.
what is short term
If the gold bond is sold within 3 years, then the return received will be treated as short term capital gains. This will be added to the annual income of the investor. Tax will be levied as per the applicable tax slab. On the other hand, if the Gold Bond is sold after completion of 3 years from the date of purchase, then the return received will be kept in Long Term Capital Gains. It will attract tax at the rate of 20 per cent with added cess and indexation benefits.
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