Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


Discussion > Income Tax > Tax queries >

Non convertible debentures

    Post New Topic
Pages : 1





Service

[ Scorecard : 224]
Posted On 17 August 2011 at 17:07 Report Abuse

Hello to All

My question is in respect of taxability of amount received on redemption of non convertible debenture held for more than 12 months.

Whether it is possible that a person did not get any amount of interest throughout the holding period more than 12 months and what will be tax treatment of amount received on redemption?

Thankyou in anticipation.


Online classes for CA CS CMA



Member (Account Deleted)
student

[ Scorecard : 847]
Posted On 18 August 2011 at 19:40

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.



Total thanks : 1 times




Mansha Tutlani
Student

[ Scorecard : 2903]
Posted On 18 August 2011 at 22:50

Completely agree with Deepak reply

In case of  listed debentures -

If the period of holding  is  more than one year , would be termed as Long term capital gain and would be taxed @ 10% without indexation and if period of holding is one year or less than one  year ,would be termed as short term capital gain and would be  taxed as per normal slab rate.

In case of Non  listed debentures -

If the period of holding  is  more than three  years,  would be termed as Long term capital gain and would be taxed @ 20% without indexation and if period of holding is 3 years or less than 3  years ,would be termed as short term capital gain and would be  taxed as per normal slab rate.



Total thanks : 2 times



Mukesh Kumar Singh
CA-FINAL

[ Scorecard : 3926]
Posted On 29 August 2011 at 12:27

Agreed with Mansha ji.....................



There are 3 Replies to this message








Related Files








Related Threads


Post your reply for Non convertible debentures



Your are not logged in . Please login to post replies

Click here to login


Not a member yet ?? Click here to signup

Message







    

  • Use thank button to convey your appreciation.
  • Maintain professionalism while posting and replying to topics.
  • Try to add value with your each post.




Forum Home | Forum Portal | Member Control Center | Who is Where | Popular Threads | Today's Topic | Recent Posts | Today's Posts | Post New Topic | Thread With Files | Top Threads This Month | Forum Stats | Unreplied Threads

back to the top