Tax on G sec (bonds specifically) in FY 2023

[Akash_Shah]

@warkaree

Question - is my understanding of points 2 and 3 above correct?

Short answer, understanding in point 2 is incorrect, point 3 is correct.

@warkaree

OTOH in Gsec (3-5 year ones) return is around 7.x% but LTCG is 10% so post tax return is 6.x%.

When you say return is around 7% that is essentially rate of interest paid,
Taxation on interest payout is at slab rate so in a way bond taxation is same as FD.

There is a chance that if you sell bonds before maturity, then you might make capital gains (or loss), only this capital gain is taxed at 10%. But generally this is very small portion. Most of your bond income comes from interest paid out, which is taxed at slab

@warkaree

How can I find out if a bond pays interest (quarterly, half yearly etc.)?

All Gsecs pay half yearly interest. Shubh maintains a list of govt. bonds and their interest payout date. This is good reference to find out interest payout dates. Or you can simply search with ISIN

Interest payment dates for government bonds (G-Sec)

Interest payment dates for all the bonds issued by the government. The interest is paid semi-annually and is credited directly to your primary bank account within 15 days from the date of interest payment. Sr. No ISIN Name Coupon rate Coupon payment date Date of Issue Date of Maturity 1 IN0020200211 4.48% GS 2023 4.48% 2nd May and November Nov 2, 2020 Nov 2, 2023 2 IN0020130061 8.83% GS 2023 8.83% 25th May and November Nov 25, 2013 Nov 25, 2023 3 IN0020210210 4.56% GS 2023 4.56% 29t…

@warkaree

I plan to hold the bond till maturity. In this case do I get the entire bond amount at maturity or it is paid at regular intervals?

For GSec you will get interest payout every 6 months (Which is taxable at your slab rate). at maturity you will be paid face value of bond (this might be different then what you invested to buy it)
Also if you hold till maturity, there will be no capital gains (or loss).

Hope this helps.