how a company will treat discount on issue of debentures and premium on redemption on debentures?can it be treated as revenue expenditure under pgbp sec 37 and deductible in full in the year of issue/redemption or ammortised proportionately throughout the life of debenture?
and please also explain will tds u/s 193 be deducted by co. on interest on debenture given?
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Tax treatment of discount on issue of debentures
Replies (3)
The loss on account of issue of debentures at premium is considered as an expenses for the borrowing and hence allowable u/s 37 of the Act. kindly refer the judgement of Kerala high court in case of CIT v/s Apollo tyres Ltd.
Further, section 193 of the Act deals with the TDS on interest on securities and it is applicable on debentures too. The rate of TDS is 10%.
Further, section 193 of the Act deals with the TDS on interest on securities and it is applicable on debentures too. The rate of TDS is 10%.
Sir but how will the deduction be allowed :
a) whole amout in same year or
b) over the lifeof debenture
in case of both discount on issue and premium on redemption
a) whole amout in same year or
b) over the lifeof debenture
in case of both discount on issue and premium on redemption
It will be allowed over the life of debentures.
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