Tax calculation on NCDs bought on exchange

POSTED BY Ramprakash ON June 12, 2013 7:03 pm ONE COMMENT

Hi

I had bought some NCDs (non convertible debentures) of FV 1000 @ 12% p.a.

The interest was credited every six months.

i.e., Rs. 60 every 6 months for each NCD.

I then again bought the same NCD from stock exchange.

In this case even though the FV remained 1000, I bought it at Market price of 1020.

On this also I got 60 Rs. as interest when it was due.

There is no TDS when the interest is credited.

Now, when I file the returns, how do I calculate the income in the second instance.

Is the income Rs. 60 Or is it Rs. 40 (1000-1020+60)?

The NCDs have not matured. But I have been getting this interest every 6 months.

I have not sold these & plan to hold till maturity.

Thanks

Ramprakash

One reply on this article “Tax calculation on NCDs bought on exchange”

  1. Dear Ramprakash, the interest income of 60+60 Rs. = 120 Rs. is taxable.

    Thanks

    Ashal

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