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Bond washing transation

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(Querist)
24 January 2014 please explaion the term bond washing transaction
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CA SAYANTAN BASU

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CA SAYANTAN BASU (Expert)
25 January 2014 Dear sir ,

In order to avoid the tax liability some time high income group assessee sell their securities to low income group friends or relative few days before the accrual or due date of interest and acquire them back after the date is over. As on the due date he is not owner, in this way he will be able to avoid the payment of tax on the interest by shifting the burden to other who may have or very little income. This is merely an eye-washing transaction. Such transaction which aims at transferring the income not the security is known as bond washing transaction.section 93 of i.t. act 1961
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