Taxation on unlisted debentures

Income Tax
1

I have invested in unlisted debentures. Can you help me understand the taxation for me:

Face value of bond - INR 10,000
Original Tenure - 24 months
Original Coupon rate - 11.5%
Holding tenure for me - 23 months
Purchase Price - 10190

Cashflows of bond is as below:
At end of 6th month - principal 2500 and interest 580
At end of 12th month - principal 2500 and interest 420
At end of 18th month - principal 2500 and interest 290
At end of 24th month - principal 2500 and interest 140

2

@Bharti_Vasvani , can you please help here

3

hi, any answer here?

4

@Bharti_Vasvani were you able to check on this.

7

Hello @Anuj_Agarwal,

There are two components of the cashflow:

Interest received shall be taxed under income from other sources at a slab rate. However, the redemption of bonds will be taxed under capital gains at slab rate. In your case, there is a loss of 190 (10000- 10190), which you can book the loss in the proportion of redemption of the principal amount.

Hope this helps!

8

Thanks @Bharti_Vasvani for this really helpful. Possible to also share the particular sections in the Income Tax.