If I now buy Sovereign Gold Bond from the stock market which matures after 5 years, will capital gains on redemption on maturity be taxed? I ask this question because the maturity of SGB is 8 years and I plan to buy and hold for 5 years.
– Saranya NT
Sovereign Gold Bonds (SGBs) are government securities, denominated in grams of gold and are an alternative to holding physical gold. SGBs are issued by the Reserve Bank of India on behalf of the government.
The interest earned on the bond will be taxable as per the provisions of the Income Tax Act, 1961. However, it comes with tax benefits in the form of exemption of capital gains tax arising on redemption of SGBs. In addition, indexation benefit is provided for long-term capital gains arising to any individual on transfer of bonds.
It is to be noted that, such exemption from tax will be available only to those investors who hold the bond till the maturity of the bond. If it is sold/transferred before maturity/redemption, it will be taxable as per normal capital gains tax provisions. Therefore, an individual can avail tax-free benefits on redemption only if the bond is held till maturity.
In the US my son sends money to my bank account to pay off his education loan from the bank as I am a co-applicant. Do I have to show it in my IT return?
Money received from abroad for repayment of education loan from your son is not in the nature of income and also does not require any reporting in income tax return.
(RSM India Founder Dr. Suresh Surana answered this question. Send your queries to mintmoney@livemint.com to get answers from experts.)
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