Dear sir/madam pls clarify 1)does 7.75% goi bonds come under capital asset 2)i have purchased Rs 10 lakh 7.75% goi bonds cumulative option(7 years).(m v 1703000) can i treat Rs 703000 /- as LTCG after 7years ,and take CII indexation benifit and i will not accrue interest every year as it will be considered as capital asset bare actt read this way Tax treatment According to the Income-tax Act, 1961, the interest earned on the bonds will be added to the bond holder's income and will then be taxed according their tax rate for cumulative bonds, tax on the interest portion of the maturity value will be deducted at source when the maturity proceeds are paid to the investor. " pls reply my 2 queries so that i get clear answer
Hi,
Hope you are doing well !
1.The Bonds are not transferable.The Bonds are not tradeable in the Secondary market and are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions. So, it will not be treated as a capital assets.
2. No, Interest on the Bonds will be taxable under the Income-tax Act, 1961 as applicable according to the relevant tax status of the bond holder.
Thanks & Regards,
Payal Chhajed
Hi,
Please find below the relevant links for your better understanding :
https://www.moneycontrol.com/news/business/personal-finance/should-you-invest-in-new-rbi-savings-bond-offering-[deleted].html
https://www.business-standard.com/article/news-cm/goi-announces-launch-of-7-75-savings-taxable-bonds-2018-commencing-from-10th-january-[deleted]_1.html
Thanks & Regards,
Payal Chhajed
Welcome !
Thanks & Regards,
Payal Chhajed
Dear Sir,
1) No,because these bonds are not transferable /tradeable.
2) No, as mentioned by you "for cumulative bonds, tax on the interest portion of the maturity value will be deducted at source when the maturity proceeds are paid to the investor. " will be the tax treatment.
Warm Regards,
Karishma Chhajer
Dear Sir,
I think you can treat them as capital assets as the purpose of your investment was not earn interest annually therefore you opted cumulative option. You can take the benefit of indexation and section 112 accordingly.
Thanks
Hi,
1. It can be treated as capital asset. However, that's irrelevant because interest will anyways be taxable.
2. No, you can't treat 703000 as capital gain. It's in the nature of interest.
Hi
No, it shall not be considered as capital asset and indexation benefit shall not be available.
The interest earned from such bonds shall be taxable under the head Other Sources. You can tax interest annually on accrual basis for 7 years.
Hi,
No, these bonds will not be considered as capital assets. The interest component will be taxable each year on the basis of accrued interest under the head income from Other Sources.
Regards
Nikhil
Hi
Since GOI bonds cannot be traded in secondary market so it can not be treated as capital assets .Capital gain arises on sale/Relinquishment/Extinguishment of rights or property, No capital Gain arises on maturity.These bonds will mature after specified period so no capital gain.
Thanks
