Do you know that the periodic interest received on non convertible debentures shall be taxable as regular income. Short term or long term The taxation on sale of such debentures will depend on the period for which such debentures have been held by you. Generally any profit on sale of debentures shall become taxable as long-term if the same have been held for 36 months or more on the date of such sale. So profit on sale of any debentures shall be taxed as short term in case they have been held for less than 36 months. However in case the debentures are listed on any stock exchange in India, the profit/loss shall be taxable as long-term if the same have been held for 12 months or more on the date of sale. So in case of listed debentures the holding period requirement is 12 months and more for it to become long-term otherwise one has to wait for 36 months to become eligible for concessional rate of tax applicable to long term capital gains. Tax rates on short term long-term profits The tax payable on long-term capital gains is 20.36% whereas the short-term capital gain in included in your other income and is taxed at the marginal rate applicable to you. However in respect of debentures listed on stock exchange the tax applicable will be 10.3% but in respect of unlisted debentures the tax applicable will be 20.36%. - Balwant Jain, CFO, Apna Paisa
Posted on: Mon, 07 Oct 2013 10:30:00 +0000
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