Hi,
Let's say somebody buys 91-day T-bills from RBI and holds it till maturity. Under what category do gains on T-Bills be reported in ITR ?. Does it need to be declared as interest income or as Short Term Capital Gains from debt?. If declared under STCG , can these gains be setoff against other Short Term capital Loss on Debut.
Thanks,
Vinod
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.
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