Tax implication on bond trading
This query is : Open
Sheetal Kapoor
(Querist)
10 August 2011
if a company have income from commision and income from trading in bonds then whether profit on sale of bonds will be treated as business income or shor term capital gain. and also if these bonds are sold to trus whose accounts are audited then whether such trust should deduct tax on such payment to such company?
CA PARAS BAFNA
(Expert)
11 August 2011
Trading income from bonds means income arising due to difference in prices which is mainly due to the accrual of interest on the bonds. It is a business income or interest income.
Payment against Bonds is not liable for TDS. Because for trust it is a purchase of an asset.
However issuer of the bonds should deduct TDS on interest, in case being paid or credited by him.
Payment against Bonds is not liable for TDS. Because for trust it is a purchase of an asset.
However issuer of the bonds should deduct TDS on interest, in case being paid or credited by him.
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