Taxation on Stocks, mutual funds and bonds

Income Tax Income from Capital Gains
1

What is the taxation for NRI clients in stocks trading, F&O trading, mutual funds and bonds?

2

Hey @Gopi_Kiran,

The taxation for NRI is similar to residents in the case of trading and the above-mentioned investment avenues. Here are a few reads for you that elaborate on the same!

3

Hi @Surbhi_Pal

  1. Are there options to reduce/avert LTCG on Equity based Mutual Funds by transferring the redeemed value as a GIFT to a family member ?

  2. Can investing the capital gains into REC, PFC, IRFC, and NHAI within 6 months lead to a tax exemption on all capital gains ?

Please share your expert opinion.

4

Hey @Pri_200892,

With regard to your Queries,

  1. Once there is LTCG on mutual funds, the same will be taxable for you even if you transfer the redeemed amount as a gift to a family member.

  2. Yes, however, there are certain limitations. You can read in detail about investment in NHAI/REC bonds here!

5

Hi Community, I would like to know tax treatment on following case:

A listed bond was purchased on market premium @ 1500/- INR from secondary market in a financial year. Face value of the bond is 1000/- INR and interest will be paid at the maturity (i.e. cumulative). The bond was held till maturity, and it matured in the same financial year. Cumulative interest earned was 600/- INR. A TDS of 60/- INR was deducted from the interest. Total 1540/- INR (1000/- INR plus 540/- INR) were received at maturity.

Particularly, I want to know that I will be taxed on 600/- INR or 100/- INR [600/- INR minus 500/- INR (premium paid to the seller)]. Also, how to show it in ITR-2.

6

Hey @shiv_gupta,

The interest received will be taxed as “income from other sources”, the TDS on which is already deducted.

Moreover, after deducting the interest received, the value of the bond remains â‚ą1000. Hence, as the bond was purchased at â‚ą1500, you can claim a loss of â‚ą500 and file ITR 2 for capital gains from the bonds.

Hope this helps!

1 Like
7

Thank You @Surbhi_Pal. Yes It helped.

8

Hi @Surbhi_Pal , is it possible to claim 500/- INR in expenses under sec 57?

9

Hey @shiv_gupta,

No, section 57 is not applicable in this case. Hence, you cannot claim the â‚ą500 as an expense.

1 Like
10

Thank you @Surbhi_Pal for quick response.