How-to G-Sec Exit

Exit G-Sec before maturity

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Step-by-step procedure

Five steps per the procedure infobox.

Why liquidity matters

Retail G-Sec secondary market in India is thin. Common scenarios:

  • Popular liquid benchmark (e.g., 7.18 GS 2033): Tight spreads, easy exit.
  • Off-the-run issues: Wide spreads, may need to wait.
  • SDLs: Often illiquid; expect waiting.

Pricing

Quoted price is “clean” (excluding accrued interest). Settlement uses “dirty” price (clean + accrued interest). See Dirty vs clean price .

Tax on exit

  • Holding less than 12 months: Short-term capital gain at slab rate.
  • Holding 12 months or more: Long-term capital gain at 12.5% (post-FY2024-25; rates change with Finance Acts).
  • Accrued interest separate, taxed as interest income.

For complex tax situations, consult a Chartered Accountant.

See also

External references

References

  1. RBI, G-Sec secondary market, rbi.org.in.
  2. Income Tax Act 1961, Sections 48 and 112.

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