Apart from the potential benefit of rising gold prices, these bonds offer investors a fixed 2.5% interest rate on their investments. Interest is paid half-yearly. Therefore, it is important that you know how your profit and interest income gold bond Tax will be levied.
Sovereign Gold Bond Scheme 2022-23 Series II Details
The face value of the bond based on simple average closing price is Rs 5,197 per gram of gold equivalent [published by the India Bullion and Jewellers Association Ltd (IBJA)] For gold of 999 purity for the last three working days of the week preceding the subscription period, which are August 17, August 18 and August 19, 2022. Investors who subscribe online and pay digitally will get a discount of Rs 50 per gram. at the issue price of SGB.
SGB ​​Taxation
SGBs have a tenor of eight years, with an option to redeem early after the fifth year on the interest due date.
According to the Economic Times news report, long-term capital gains will be taxed at 20% along with indexation gains if the SGBs are redeemed after a lock-in period of 5 years but before the maturity period of 8 years. Interest earned on SGB is taxable as income from other sources, while TDS is not applicable on bonds.
Interest on SGB is taxable under the provisions of Income Tax Act of 1961. (43 of 1961). Capital gains derived from redemption of SGB by an individual are exempt from tax. Long-term capital gains arising from transfer of SGB will be eligible for indexation benefit.