FINANCIAL YEAR is just a few days from the end. And with this, the confusion of tax has also started. The question in front of traders is that how much tax will they have to pay on the profits. If there is a loss then how will LOSS carry forward. Today, we are focusing on the tax on BOND and debentures. Tax expert Sharad Kohli is associated with CNBC-Awaaz on this issue, which will get your smart tax planning done.
Listed BOND, tax on debentures
Listed BOND and debentures hold STCG tax on holdings of less than 1 year. Earnings from bonds are added to your income. After which you have to pay tax according to the slab. At the same time, if your holding is more than 1 year, then 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.
Unlisted BOND, tax on debentures
Holdings below 36 months attract STCG tax. In this also, you have to pay tax according to the slab. Holdings for more than 36 months attract LTCG tax but this LTCG has to be paid at the rate of 20%. In this also you do not get the benefit of INDEXATION.
Tax on CONVERTIBLE debentures
Converting into shares is considered redeemable and tax has to be paid according to the share conversion price.
Difference between DEBT MF and BOND
DEBT MF and BOND both have different tax treatment. INDEXATION does not benefit in BOND whereas INDEXATION reduces tax liability in DEBT MF.
BOND, how to save tax on debentures?
If you are in a slab of less than 10%, then book the profit before 1 year. Investing in 80C, 80D, NPS can save tax. 80C, 80D, NPS will save tax of up to 2.25 lakhs. Also, education and home loans can also save tax from interest.
What should traders keep in mind?
If you are claiming your expenses then keep the entire bill with it. If you get a notice of the IT department due to any reason, then these deposit bills will be useful to you. Because later you may have to upload the bill later. Keep an eye on cash, FNO turnover. Make the audit happen when the limit is crossed.
How much tax will I have to pay?
SLAB NEW REGIME OLD REGIME
0-250000 0 0
250000-500000 5% 5%
500001-750000 10% 20%
750001-1000000 15% 20%
1000001-1250000 20% 30%
1250001-1500000 25% 30%
Above 15 Lakh 30% 30%
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