Market Linked Debentures are bought back before maturity by the issue.
What is the tax liability on difference between the issue price and buy back price in the hands of investor?
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Market Linked Debentures
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The difference between the buyback price and the issue price is considered as interest income for tax purposes As per Indian tax laws, interest income from debt instruments like debentrures is taxable as "Income from Other Sources" under the Income Tax Act, 1961.
So, the gain (difference between buyback price and issue price)would be taxable as interest income at the applicable tax slab rate for the investor.
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