deep discount bond

Deep Discount Bond is a bond that sold(issued) at a great discount. These are to be taxed as a Capital Gains on maturity. Though there is a confusion in between about the accrual of income on these bonds, now the matter is settled that these bonds income to be taxed at the end (maturity)

issued at lower price...maturity price is the face value...difference is cap gain

taxation is onthe basis  of market price at theend of the year...difference b/w market price and opening price