Holdings of less than 36 months on unlisted bonds and debentures attract STCG tax.
Tax expert Sharad Kohli has described the methods of Smart Tax Planning. According to them, if you are in a slab of less than 10%, then book profits on bonds and debentures before one year.
Today, we are focusing on the tax on BOND and Debentures. On this issue, tax expert Sharad Kohli associated with CNBC-Awaaz has told the ways of smart tax planning. According to him, short-term capital gains (STCG) tax is levied on listed BOND and debentures holding less than 1 year. Earnings from bonds are added to your income. After this, according to the slab, you have to pay tax. At the same time, if your holding is more than 1 year, then long term capital gains (LTCG) tax has to be paid and this LTCG tax is charged at the rate of 10%. Keep in mind that you will not get the benefit of INDEXATION in this.
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STLG tax levied on holding unlisted bonds and debentures less than three yearsHoldings of less than 36 months on unlisted bonds and debentures attract STCG tax. In this too, you have to pay tax according to the slab. Holdings of more than 36 months attract LTCG tax but LTCG has to be paid at the rate of 20%. Even in this, you do not get the benefit of INDEXATION.
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Convertible debentures will be taxed as per share conversion price
Convertible debentures (CONVERTIBLE) are considered redeemed to be converted into shares and tax is to be paid according to the share conversion price. At the same time, there is a difference in tax treatment of both DEBT MF and debt BOND. INDEXATION does not get benefit in BOND whereas INDEXATION reduces tax liability in DEBT MF.
BOND can save tax on debentures in this way
If you are in slab less than 10%, then book the profit before one year. Tax can be saved by investing in 80C, 80D, NPS. Up to 2.25 lakh tax will be saved in 80C, 80D, NPS. Also, education and home loans can also save tax from interest.
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Traders need to keep these things in mind
If you are claiming your expenses, then keep the entire bill with it. If for some reason the notice of the IT department comes to you, then the bills deposited with you will be useful. You may also have to upload bills later. Keep an eye on cash, FNO turnover. Make the audit happen when the limit is crossed.