Tax on profits from selling assets held for specified long-term period
Tax on profits from selling assets held for specified long-term period
Long Term Capital Gains (LTCG) tax applies to profits made from selling assets held beyond a specified period.
For SGBs: - Holding > 3 years in secondary market = Long term - LTCG rate: 20% with indexation benefit - BUT: Maturity gains are COMPLETELY TAX-FREE - This is SGB's major advantage
For comparison: - Gold ETF: 12.5% LTCG after 1 year - Physical gold: 20% with indexation after 3 years - Both are taxable, unlike SGB maturity
The tax-free maturity benefit can mean 15-20% higher effective returns compared to other gold investments over 8 years.