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RBI direct G sec securities

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Mahesh Shah

2478 Points Posted on 30 August 2022

1) In case of Buying RBI direct retail G sec securities from RBI direct retail platform from open market ,and when these are again not resold in RBI direct retail platform, but matured on maturity, then., will it be long term or short term capital gain??
because if directly allotted by RBI issue and matured on maturity then only int. is taxable as FD int.

Replies (2)

Quick Summary

This discussion clarifies the tax treatment of Government Securities (G-Secs) purchased through the RBI's retail platform. If you buy G-Secs from the RBI's trading platform and hold them until maturity, any interest earned is taxable. Crucially, it is not treated as a capital gain (either long-term or short-term) in this scenario, unlike direct allotments from an RBI auction where only interest is taxed.

Adv. Ravish Bhatt, ADIT, CIOT

Dual Qualified Lawyer/ Solicitor Intern

1110 Points Posted on 01 September 2022

You are right Maheshji..In a scenario explained by you of GSEC being purchased from RBI direct retail and repaid on maturity, no capital gain will be applicable. Simply any interest paid in between will be taxable.

Mahesh Shah

2478 Points Posted on 01 September 2022

@ Ravish ji ...thanks for reply.

Sir, My point is if I buy from RBI trading platform ( not directly first issued by rbi) and amounts directly credited to my account on MATURITY , then in this scenario, will it be LTCG/STCG??

Above query is different from scenario where I get allotment on 1 St instance directly from auction by RBI and account credited on maturity ( here only int is taxable.....no qs of LTCG/STCG) as i am buying on 1 St auction and on maturity directly credited in a/c