Capital gains Taxation of 8% Savings Bonds - RBI

The 8% savings (Taxable) bonds 2003 - income tax act 1961 - 

Whether 8% savings taxable bonds  2003 are to be considered as capital asset or not. If we considered as capital asset whether the same is liable for Capital gains under Income tax act 1961 or not.

And if it is liable for the capital gains whether indexation benefit is available for such calculation of  Capital gains at the time of maturity of such 8% Savings Bonds issued RBI.


Kindly suggest on the above.
Asked 2 years ago in Income Tax from Bangalore, Karnataka
If you are holding the bonds as capital asset then it will be considered as capital asset. Yes it is liable to capital gains if your receiving any gains. Yes it is eligible for indexation benefit.
Vijay N. Kale
CA, Hyderabad
248 Answers
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As per our view the interest on such bonds to be considered as income only. There is no need of considering the same as capital Asset.They are only investments.

If you consider it as capital asset the all rules of capital gains will apply.
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
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