Q1.Whether it is possible that a person did not get any amount of interest throughout the holding period more than 12 months?may be possible.....but chance is less
Q2.what will be tax treatment of amount received on redemption?
For income tax purpose, the debentures are treated like debt instruments.
The interest earned would be treated as any other interest (say, from a bank FD). It would be a part of your “Income from other sources”, and would be taxable.
However, whether there would be TDS (Tax Deducted at Source) or not depends on many factors, and would vary from one debenture issue to another.
A debenture is a capital asset. If you sell the debenture on the stock exchange before holding it for a year, it would be a short term capital gain – it would be included in your income and would be tax as per prevailing IT slabs.
If you sell it on an exchange after holding it for a year or more, the gain would be long term capital gain. This LTCG should be calculated without indexation, and would be taxed at 10% of the gain.
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