I was allotted NCD for 1 lac on 10-10-2012 by Religare Finvest. I sold the NCD on 8-9-2015 through the stock exchange. What will be my tax liability?
- Narinder Thakur
Non-Convertible Debentures are issued when a company borrows funds from the public. They are issued for a specific time period with a fixed interest rate. There are various modes of interest payout: quarterly, annually or at the time of maturity. NCDs, as the name suggests, cannot be converted into equity share of company at any time. If sold within 12 months of purchase, short term capital gains will be added to your income and taxed as per the applicable Income Tax slab rate. If sold after the completion of a year, long term capital gains will arise and they will be taxed at 10 per cent.
This article was originally published on December 21, 2015.
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