Tax liability on int incomes from nhai / rec bonds?

This query is : Resolved 

15 January 2012

Dear Experts,

We want to buy NHAI / REC Bonds under section 54 EC to avoid tax on LTCG out of Sale of Residential house property of a firm.

i want to know
1) the tax liability of interest incomes from investment in bonds, is this income is chargeable to tax in the hands of firm.

2)Tax liability on LTCG / Loss at the time of sale of bonds.

Waiting for your reply..
Thanks in advance.


N. Patidar (Expert)
16 January 2012

Dear Querriest

INterest on NHAI/REC bonds is taxable under income from other sources as per method of accounting regularly followed for Income from other sources head.You can opt for different method of accounting for different source of income.

2. Excess amount received from cumulative balance (Principal +Interest) is taxable under Capital Gain.

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