Taxation on interest from NCD

POSTED BY Ramprakash ON February 1, 2013 5:00 pm COMMENTS (3)

Hi

I have a few NCDs (Non Convertible debentures) which I plan to hold till maturity.

The interest is given yearly on 1st April but generally gets credited into bank account around 10th of April every year.

Now, when I get the interest on 10th April 2013 should I show this in my IT returns for FY 2012-2013 (AY 2013-2014) or in FY 2013-2014 (AY 2014-2015) ?

Note: The companies do not deduct any TDS while crediting interest even when the interest amount is nore than 10000 INR.

 

Thanks

Ramprakash

3 replies on this article “Taxation on interest from NCD”

  1. Ramprakash says:

    Thanks FFC and Ashal.
    It is clear that applicable tax year will depend on the actual date of credit of interest rather than the period for which the interest was accrued.

  2. Dear Ramprakash, you should use the interest credit date as your date for tax liability. So the Interest paid to you on 10-04-2012 is your income in FY 2012-2013, although the interest was for Fy 2011-2012 in actual.

    Thanks

    Ashal

  3. NCDs are taxed as ‘income from other sources’ so you need declare in the return and pay appropriate tax

    10th April 2013 is part of FY 2013-2014. So you need to file returns for this in AY 2014-15

    If you sell them short-term gains (less than year old) as per slab rates
    long term gains at 10%+ education cess

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