Budget 2021: Section 47 of the Income-Tax (I-T) Act provides that any transfer of Sovereign Gold Bonds (SGBs), issued by the Reserve Bank of India (RBI) under the Sovereign Gold Bond Scheme, 2015, by way of redemption, by an assessee being an individual shall not be treated as a transfer for the purpose of capital gain. According to research and advisory firm, Taxmann, Section 47 still refers to the sovereign gold bond issued under the Sovereign Gold Bond Scheme, 2015. However, the government issues a new sovereign gold bond scheme every year under its series of tranches for a period of five days each. Taxmann said in its pre-budget recommendations to the government that section 47 should be amended to remove the reference of any particular year from the sovereign gold bond scheme. (Also Read: Sovereign Gold Bonds Subscription For Tenth Tranche Ends Today: What You Need To Know )
A similar amendment is also required under the fourth proviso to section 48 which provides the benefit of indexation while computing long-term capital gain arising from the transfer of sovereign gold bonds. The sovereign gold bond scheme is an investment scheme of the government that offers investors an alternative to hold gold in physical form. There are several benefits of investing in these gold bonds. An individual is not liable to pay the capital gain tax on redemption of sovereign gold bonds.
Meanwhile, the 10th tranche of the sovereign gold bond scheme 2020-21, opened for subscription on Monday, January 11, and was available for investing till Friday, January 15. For the 10th installment of the gold bond scheme, an issue price of ₹ 5,104 per unit, equivalent to the value of one gram of gold, was applicable, according to RBI. A discount of Rs 50 was applicable for those investing in the scheme online and the payment was done through digital modes. For those investors, the issue price was set at Rs 5,054 per gram of gold. The government will open the next window for investing in gold bonds — Series XI of the SGB 2020-21 scheme, on February 1, 2021, for five days.