My son in the United States sends me money to pay off the loan. Should I display it in my ITR?

If I now buy gold sovereign bonds from the stock market that mature after 5 years, will capital gains tax have to be paid on redemption at maturity? I am asking this question because SGBs have an 8 year maturity and I plan to buy and hold for 5 years.

– Saranya NT

Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold and replace the holding of physical gold. SGBs are issued by the Reserve Bank of India on behalf of the government.

Interest accrued on the bonds will be taxable in accordance with the provisions of the Income Tax Act 1961. However, they come with a tax advantage in the form of an exemption from the capital gains tax resulting from the buyout of SGB. In addition, the benefits of indexation are given to long-term capital gains from any person when transferring bonds.

It is relevant to note that such a tax exemption will only be available to investors who hold the bond to maturity. If the same is sold / transferred before its maturity / redemption, then it will be taxable in accordance with normal capital gains tax provisions. Therefore, an individual can only receive tax-free benefits on redemption if the bond is held to maturity.

My son in the US is sending money to my bank account to clear his student loan from the bank because I am a co-applicant. Do I show it in my computer statements.

Money received from abroad from your son for the repayment of the student loan is not income and no declaration is required on the income tax return.

(Question answered by Dr Suresh Surana, Founder of RSM India. Send your questions to [email protected] for expert answers.)

To subscribe to Mint newsletters

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now !!

Dorothy H. Lewis