Bonds capital gains

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This discussion clarifies the tax treatment of long-term capital gains on bonds where Securities Transaction Tax (STT) was not paid. While interest income is taxed annually, gains from selling such bonds after 36 months are subject to a 20% tax rate with indexation benefits. The conversation highlights a potential discrepancy in ITR 2 regarding the reporting of the cost of acquisition with indexation for non-government bonds.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

03 September 2021 Bonds on which STT is not paid held for long term period are taxable @ 20% with indexation benefit

However in ITR 2 under capital gains "Bonds or debenture (other than capital indexed bonds issued by Government" cost of acquisition without indexation is specified.

My question is how to show Cost of Acquisition with indexation ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 September 2021 Capital gains not applicable on bonds. Yearly interest paid on bonds is taxable under income from other sources.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

03 September 2021 Bonds are sold after holding for 36 months and earned long term capital gains which are taxable
These are not government bonds but of EDELWeiss Asset Management Ltd

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