Debentures

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Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2014 Why indexation is not applied on debentures?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 July 2014 As annual interest payment is made on debentures no indexation applied.

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2014 Suppose i am a house dealer and also provide houses on rent.....i.e i am getting annual rent from one house say x.....now if i sell this house after 10 years i will apply indexation benefit on it......
Now if i compare interest (Debenture) with annual rent.......Then why indexation benefit is given to me on house..............(When house is giving me annual rent like annual interest..)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 July 2014 For the house property besides rent value appreciation will be there. The rent received is less when compared to the value of the property.(Rent received will be less when compared to interest)
No such value appreciation is there in case of Debentures if interest is paid annually, hence no indexation benefit is applied.
Indexation benefit is applied to counter inflationary effect.

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