Taxation on ncds

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rajat (Querist)
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18 December 2014 I have allotted 100 NCDs of a company on 1st April 2012 at face value of Rs.1000/- making investment amount of rs 1,00,000/- Interest 11% compounded annually payable at maturity after five years having maturity value of Rs. 1,68,500/- . on 6 December 2014 i have sold these ncd in secondary market at Rs. 1400 per NCD getting Rs 1,40,000/-

Please tell me taxation for these NCD as i have sell them before maturity in market . Please note that i have shown accrued intrest upto 31 march 2014 in my previous returns totaling of 23,210

Amol S Joglekar

Amol S Joglekar (Expert)
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18 December 2014 Show the difference 140,000-123210 = 16790 as short term capital gain.

rajat

rajat (Querist)
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18 December 2014 Totally agreed sir difference will be shown at Captial gain . Just confirm me that will it not be Long term Captial Gain as i hold NCDs more than 12 month period ie period from 1 April 2012 to 6 December 2014

Amol S Joglekar

Amol S Joglekar (Expert)
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18 December 2014 Yes, it can fall under the definition of security u/s 2 h of Securities Contract Regulation Act
The gain is LONG Term and not short Term.
Thank you for the query.

rajat

rajat (Querist)
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19 December 2014 Thanks for your Expert Advice . I will do as directed by you.

Amol S Joglekar

Amol S Joglekar (Expert)
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19 December 2014 Sure.
Thank you once again.

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