Respected Sir,
I am planning to invest on GoI 8% bonds. Wanted to understand tax implication if i choose cumulative option. In one of the website the saw thes statement " In case of 8% Saving Bonds tax will be deducted at source while making payment of interest on the non-cumulative bonds from time to time and credited to Government Account. Tax on interest portion of the maturity value will be deducted at source at the time of payment of the maturity proceeds on the cumulative bonds and credited to Government Account."
As per the above statment Tax will be deducted at the time of payment of the maturity proceeds, which means tax will be deducted only after 6 years, unlike in FD where tax is deducted every year though we choose cumulative option. Please provide clarity on this aspect.
Regards,
Divakar
CAclubindia
