Consider the following statements regarding Sovereign Gold Bonds (SGB) issued by RBI:
1. They are denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
2. The tenure of the bond is 8 years with an exit option after the 5th year.
3. Capital gains tax arising on redemption of SGB to an individual is exempt.
Which of the statements given above are correct?
Answer and explanation
Correct answer: D. 1, 2 and 3
- Step 1: SGBs are denominated in multiples of grams of gold with a minimum subscription of 1 gram. Statement 1 is correct.
- Step 2: The bond tenure is 8 years, with early redemption permitted from the 5th year on coupon payment dates. Statement 2 is correct.
- Step 3: Under Section 47 of the Income Tax Act, capital gains tax on redemption of SGBs to an individual investor is fully exempt. Statement 3 is correct.
Answer
1, 2 and 3 are correct.
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