Hello sir,
I have bought SGBAug27 maturity tranche from the secondary market 1 month back. Please clarify my 3 situations below:
If I hold this till maturity, will I be taxed because I purchased from secondary market / did not hold it for a period of 8 yrs?
Supposing if I sell it in secondary market after 1 year, will I be taxed for capital gain?
Suppose I redeem it after 5 years of bond period, will I be taxed?
I too had some doubts regarding SGB, so one user sent me the following link, maybe it can help you.
https://m.rbi.org.in/Scripts/FAQView.aspx?Id=109
Thanks stonecold. But those faq s doesnât answer my questions. Any info will be of great help. Thanks
Yes, if you make any capital gains you will be taxed but the indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond. In your case if any capital gains those will be taxed accordingly.
Unless you hold from start to maturity , you will be taxed based on short term or long terms, also these are only on profits.
Yes, on your profits, but long term indexation benefits should apply.
Hi @siva-reddy
As I understood from https://m.rbi.org.in/Scripts/FAQView.aspx?Id=109, capital gains are exempt from tax if the bonds are redeemed on maturity.
And based on the reply I got here, Selling Sovereign Gold Bonds, gains should remain tax free on maturity even if bought from the secondary market, which seems contradictory to your first answer.
Could you please clarify if gains are tax exempt or taxable at redemption on maturity, if bought from the secondary market?
I donât think so it will tax free if one buy from secondary market and held till maturity, one can buy 1 year before maturity and can claim right which defeats the whole purpose. Let me try finding it out, you can also check with CA if you know anyone.
Capital gains come into picture only if you âtransferâ the bonds which is when you sell them to someone else in secondary market. If you let them mature, it is tax exempt as per that RBI link. So it doesnât matter whether u buy it from secondary market or directly from Govt, u pay taxes only if you sell it in secondary marketâŚ
Hi akshit and Siva,
Pls refer I found in internet.
But not sure as no other site mentions this
Hi @AJ007, thank you for responding to my query again and clearing up this doubt.
@siva-reddy, it does seem like it remains tax free on redemption at maturity even if the bond was bought from the secondary market, with further backing from the link @Vijay_Shankar has helpfully posted. I will try confirming the same with a CA when possible.
Thanks for clarifying on SGB Taxes Siva, Will I get the interest on the SGBâs bought from Secondary market? Like: I bought SGBAPR28I-GB today, will I be entitled for an annual interest of 2.5% on this SGB unit bought from secondary market? Thanks!
Yes, you will receive directly in to your bank account.
If we buy before 1 year and hold it till maturity, it doesnât come under the category of LTCG at all.
Thanks @siva-reddy, @AJ007 and @akshit for your thoughts. Were anyone of you able to get in touch with any good CA and find out our case? Any credible info will be of big help please.
No, it wonât.
@siva-reddy I applied for SGB in this latest tranche and received the certifictae. however I am not able to see it in my account. Could you please let me where I can see the latest tranche of my gold.
Thanks!!!
Until SGBâs are listed in market, you wonât see them in Kite holdings, you can see them in Holdings on Console.
Thanks for the response I will check.
When would this get listed in Market?
From date issuance, it usually takes 10-15 days for SGBâs to list on exchanges. June SGB issue was allocated on 16th June and listed on market on 24th June, so going by that July SGB listing should be around the corner.
