capital gain on deep discount bonds

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Malani Singhi and Associates (Querist)
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27 January 2010 My question is : What will be the tax treatment of Deep Discount Bonds on maturity which was originally purchased in 1995?

Please reply soon.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 January 2010 If the bond matures, the redemption price minus the issue price will be charged as interest income.
If you sale before maturity, the difference between Sale price and issue price will be charged to capital gains.No indexation is allowed as section 48 of the I T Act does not permit indexation incase of bonds and debenture.

Malani Singhi and Associates

Malani Singhi and Associates (Querist)
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29 January 2010 thank u sir 4 ur reply!!!