Q. Consider the following statements regarding the Sovereign Gold Bonds (SGBs):
1.The primary objective of issuing SGBs is to reduce the demand for physical gold.
2.Securities and Exchange Board of India (SEBI) issues Sovereign Gold Bonds on behalf of the Government of India.
3.The interest earned on SGBs is exempted from taxation.
How many of the statements given above are correct?
Answer: A
Notes:
Explanation –
Statement 1 is correct. The primary objective of issuing SGBs is to reduce the demand for physical gold, thereby reducing the import of gold and helping to manage the country’s current account deficit.
Statements 2 and 3 are incorrect. Sovereign Gold Bonds are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The interest earned on Sovereign Gold Bonds is taxable as per the provisions of the Income Tax Act, 1961. However, the capital gains tax arising on redemption of SGBs to an individual is exempted.
Source: The Hindu
