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Interest on zero coupon bonds
Interest in zero coupon bonds allowed as expenditure?
Replies (2)
Quick Summary
No interest is generally paid in case of zero coupon bond. At the time of maturity, bondholders will receive the face value of the bond and are issued at discount,
Yes, it is allowed as an expenditure. Since zero-coupon means no interest, the discount amount is allowed as an expenditure. See section 36(1)(iiia) and rule 8C.
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