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Tax on interest received from listed bonds

Tax queries 419 views 1 replies

Kindly let me know the tax treatment for the interest received from listed taxable corporate bonds.

Face Value of Bond:    1000
Coupon Rate:               8 % per year payable on 31 March every year
Bonds bought:              200 bonds bought from stock exchange on 1 March 2020 at a rate of 1070 per Bond
Interest received:         Rs. 16000/- on 31 March 2020

Question: Tax to be paid on actual total interest received of Rs. 16000/- or tax to be paid on interest for one month from 1st of March till 31 March 2020

Thanks 

Replies (1)

Since it was acquired as cum interest bond, adjust the interest received into cost of acquisition of the bond(1070 less 80*11/12)in the ratio of 11:1(80*1/12) and show 1 month interest as income for the year 2019-20.


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