Government Bonds & SDLs

1. Interest Income:

• Considered "Income from Other Sources" and taxed as per your applicable income tax slab.

2. Capital Gains Tax:

• Long-Term Capital Gains (LTCG): Tax rate increased from 10% to 12.5%.
• Short-Term Capital Gains (STCG): Taxed as per the applicable slab rate.

3. Tax Deducted at Source (TDS):

• If interest payments on Government bonds exceed ₹10,000, TDS @ 10% is deducted.

T-bills

1. Pricing & Gains:

• Purchased at a discount and redeemed at par.
• The appreciation (difference between purchase and redemption price) is treated as STCG.

2. Taxation:

• Taxed as per the applicable slab rate.