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What are the applicable taxes for G-secs?

The tax rates for G-secs are as follows:

  • Bonds and SDL: Interest credited to the bank account is considered income from other sources, and taxes have to be paid according to the income tax slab. Appreciation in bond prices is considered capital gains, and Long Term Capital Gains (LTCG) are 10% flat. Short Term Capital Gains (STCG) are as per the applicable slab rate. There is no Tax-deducted-at-source (TDS) for the interest payments received for G-secs.
  • T-bills: T-bill are bought at a discount and sold at par. The appreciation is considered as STCG and taxed as per the applicable slab rate.