What is the treatment of interest accrued on bonds paid to seller. Can the same be adjusted from the interest received by buyer on cash basis. How to show the same in ITR2?
The interest paid to the seller of bonds will be included in the purchase price of the bond,i.e, the concept of Dirty price applies.
So, the interest received by the buyer cannot be adjusted.
Sale of Bonds and Debentures is considered to be a Capital Gains Income and reported as Income from capital gains in ITR 2.
Read more about Income Tax on Bonds & Debentures - Learn by Quicko
Hope this helps.
Thanks for your prompt response & advice.