Capital Gain Computation - u/s. 50AA can apply in Foreign Bonds - Listed or Unlisted in US

[PRIYAM KHAMBHATA]

Respected Sir

Thank you for guidance me on Issue Id 121016.

Further, In reference to the opinion given against Issue Id 121016, I have a question or doubt and which has to confirm and clear that, as per your given opinion on Specified Mutual Fund ie US Listed ETFs', Special Provision for Computation of Capital gain on sold Foreign US Listed ETFs', provision of section 50AA do not apply. But it may kindly be noted that my client has sold US Bond also. Therefore, my query regarding sold out of

VANGUARD SHORT TERM BOND - BSV

VANGUARD TOTAL BOND MARKET - BND

Please guide me that whether, above stated US bonds are covered under Market Linked Debentures as US unlisted or listed bonds), In this regards, the provision of section 50AA - Special provision for computation of capital gain on sold of Foreign Bonds will apply.

Thanks

AI Summary

ETF units are distinct from underlying bonds, so Section 50AA does not apply solely because bond-heavy funds are sold.
BSV and BND are described as U.S.-listed ETF units rather than direct bond holdings, debentures, structured notes, or market-linked debt instruments. The relevant asset is the security transferred, not the nature of the ETF's underlying investments. Therefore, the bond-heavy composition of these ETFs does not by itself bring their sale within Section 50AA. Direct sales of U.S. corporate or government bonds, or structured notes, would require separate examination, subject to verifying that the securities sold were ETF units.