Income tax on Treasury Bills

Thanks Kapadia for the reply.  Just for clarification.  There is no separate interest payment.  The T-bills are of face value 100 and allocated at 98.   On maturity RBI pays back 100.  Will the difference between the allotment price and maturity price be considered as Interest ?

I just googled and I find various websites mentioning that there won't be TDS done on interest from GSECS and T-Bills but the amount is taxable.  Saves hassle of claiming refund if total income is non taxable.

Thanks,

Vinod

why can't I change the company name ? such here is I have the second Poros if can be ( and the not very clear )

1.T-bills are not issued in scrip form.They are Dr/Cr in RBI SGLedger.This means CG provisions don't arise.

2.They pay no coupons/interest.So can't show interest income.

3.Strictly speaking , T-Bills are Auctioned and not issued at a"discount".

Weighted average market determined"auction price" is what they're issued at.

4.They are issued as a "promissory note" form in physical form and just as Dr/Cr entry in demat form.

5.If held till maturity, there's no Income Tax!

6. it's a close substitute for money , hence can't be treated as "Income".

I challenge all CA / ICWA/ CS to prove otherwise, by quoting relevant sections of Income Tax.