Key Points
The nominal value of the bond is based on the simple average of closing price published by the India Bullion and Jewellers Association Ltd (IBJA)) for gold of 999 purity of the last three working days of the week preceding the subscription period..
Apart from capital appreciation, SGBs offer a 2.5% interest on the capital appreciation, Personal Finance expert Jitendra Solanki..
Moreover, there is no expense on managing it, the expert said.. Tax Tips. Solankis advice to investors is to remain invested for 8 years to take benefits of capital gains tax exemption...
Selling SGBs in the secondary market before maturity invites tax at the rate of 20% on capital gains arising on such transactions..
The instrument gives indexation benefits to the buyers if the SGB is sold on or after three years and would also be subject to marginal tax rate if sold before three years.. 8 Reasons why you must buy SGBs:. 1) SGBs are good long term investment bets and capital appreciation is likely to happen significantly if one holds it for 8 years...
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