I would like to seek clarification on tax treatment of NCDs subscribed through your office.
The details of the same are:
Name of the issuer: Indiabulls Consumer Finance
ISIN: INE614X07126
Date of Allotment: 27-06-2019
Date of redemption: 31-07-2020
Coupon basis: Zero interest
Name of Investor: Gauri Tarachand Ahuja
Amount of investment: Rs 1,50,000
Amount received on redemption: 1,66,515
Would like to understand whether the gain of Rs 16,515 is to be offered as tax on long term capital gain on zero coupon bonds or the tax treatment is different?
Ans: The Zero Coupon Bond has completed one year and hence this is considered as long term for a listed bond (for unlisted bonds, it is 36 months).
It will be treated as LTCG and you can pay tax at 20 per cent + surcharge/cess, with indexation benefit.