Accounts

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).