Our teams advise on matters related to NRI Taxation, Financial Planning or Personal Tax, if you have any questions,
feel free to ask by clicking on below login buttons

will long term capi...
 
Share:
Notifications
Clear all

will long term capital loss be calculated on tax free bonds bought at a premium and redeemed at face value?

1 Posts
1 Users
0 Likes
79 Views
0
Topic starter

Hi. A client wants tax free bonds. Some bonds available in the secondary market are traded at a premium. Assuming I buy a 8% coupon bond that matures in 2023 at Facevalue 1000 Rs for Rs.1130/- today - will the Rs.80/- receivable in 2022 and 2023 be tax free? Can I claim short term capital loss on purchase and sale of the bond?

1 Answer
0
Topic starter

The period for considering long term for listed bonds is only 1 year not 3 years (as per first proviso to section 2(42a)
The interest stripping provisions under section 94(7) become applicable only if the tax free bond is bought within 3 months before the record date and sold within 3 months of the same record date

Share:
Scroll to Top