Saliq Ansari
(CA_Final Student)
(885 Points)
Replied 25 February 2016
Bonus Debentures are the debentures issued free of cost to the shareholders in the proportion of their shareholding by capitalizing the amount of Reserves And Surplus. These Debentures are redeemed after a specifc period of time and interest is paid at the approved rate during its validity period. Interest received would taxable in other sources, and capital gain tax would arise at the time of redemption of debentures (the cost of debentures to share holder will be taken as nil).
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