Ch.8 · Dividend and STT Taxation · medium
What is the tax implication of investing in 'Sovereign Gold Bonds (SGB)' vs a gold mutual fund?
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EXPLANATION
SGBs offer a unique tax advantage: gains upon maturity (after 8 years) are completely exempt from capital gains tax. Interest received (2.5% p.a.) is taxable at slab rate. Gold mutual fund/ETF gains are taxed at slab rate regardless of holding period. For long-term investors (8+ years), SGBs are significantly more tax-efficient than gold funds, though they sacrifice liquidity and cannot be invested via SIP.
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