2 days ago
4
I invested successful sovereign golden bonds (SGBs) successful FY16 and received the maturity proceeds successful FY24. According to the terms, the proceeds are exempt from semipermanent superior gains taxation if redeemed connected maturity. My question is: Am I required to state my net from these bonds successful my ITR2 for AY25? If so, where? I bash not find immoderate proviso successful Schedule Capital Gains successful the ITR2 return.
- Praveen Godbole
SGBs are authorities securities issued by the Reserve Bank of India, and are denominated successful grams of gold. Capital gains arising connected redemption of the bonds connected maturity would beryllium considered arsenic an exempt transportation nether conception 47(viic) of the Income Tax Act, 1961 and hence, not liable to tax.
While HUFs, trusts, universities and charitable institutions are besides eligible to put successful these bonds, exemption from superior gains tin beryllium availed lone by an individual.
While the tenor of the bonds is 8 years, they tin beryllium redeemed aft the 5th year. The exemption proviso does not separate betwixt redemption connected maturity and premature redemption. Therefore, 1 whitethorn beryllium capable to instrumentality a presumption that superior gains arising connected redemption of the bonds, irrespective of whether connected maturity, oregon a premature redemption, would beryllium exempt from tax.
You should disclose specified exempt gains nether 'other exempt income' successful Schedule EI of your income taxation return. In the inferior driblet down, prime 'any other' arsenic the quality of income, and supply a description.
Note: not each superior gains from the transportation of the bonds is exempt from tax. These bonds tin besides beryllium traded connected a recognised banal exchange. Capital gains arising connected merchantability of the bonds to different capitalist would beryllium taxable.
If the bonds are held for much than 12 months, the capitalist volition beryllium capable to assertion the payment of indexation of the outgo of acquisition for computing semipermanent taxable superior gains.
Such semipermanent superior gains would beryllium taxable astatine 20% positive applicable surcharge and acquisition cess aft considering the indexation, oregon 10% positive applicable surcharge and acquisition cess without indexation, whichever is much beneficial.
If the bonds sold to different investor, are held for 12 months oregon less, short-term superior gains connected the merchantability volition beryllium taxable astatine the complaint applicable to the investor.
The taxable gains person to beryllium be disclosed successful the instrumentality of income successful Schedule CG, dealing with superior gains.
In summation to the summation successful the worth of the bonds successful enactment with the terms of gold, an capitalist besides receives involvement connected the archetypal contented terms of the bonds, doubly a year. Furthermore, successful lawsuit of redemption, involvement is paid to the capitalist on with the maturity amount.
Interest connected these bonds, including amounts received upon redemption, is taxable arsenic 'Income from different sources. You should disclose this involvement successful Schedule OS of your income taxation return.
Mahesh Nayak is manager astatine CNK & Associates LLP
— If you person a idiosyncratic concern query, constitute to america astatine mintmoney@livemint.com to get it answered from experts
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