Taxation on interest at the time of allotment of bonds

nitin (professional) (83 Points)

14 July 2014  

Is interest received along with the allotment, 

on tax free bonds 2013-14, taxfree?





The interest is in two parts.One part is interest received on refund amout, which is at a lower rate of 5% and other part is interest on allotment amount which is at the coupon rate.