By Chirag Nangia
What is the tax on NCDs with cumulative payment selection if held for more than 36 months? And what really should be the tax applicable on listed vs non-listed NCD?
—Devanshu Agarwal
Interest on NCD is taxed beneath head ‘other sources’ at applicable slab prices, paid periodically or cumulatively. Interest is not topic to tax deduction at supply if NCDs are held in dematerialised kind and are listed on a stock exchange. Profit on sale/ redemption of NCDs has to be provided to tax as ‘Capital Gains’. For listed NCDs, gains are classified as extended term, if NCDs are held for a period more than one year, else it is treated as quick term. Gains from sale of unlisted NCDs are extended term if the debentures are held for more than 36 months. While STCG is taxed at applicable slab prices, LTCG is taxed at a flat price of 20% with indexation. However, for listed NCDs, LTCG may well be computed at 10% without having indexation/ 20% with indexation, as per your selection.
I am a salaried particular person and have significantly less than Rs 1 lakh LTCG from equity shares. For filing ITR of AY 2021-22 , do I have to mention my LTCG in capital gains in ITR 2 or do I require to file ITR 1 considering the fact that LTCG is significantly less than Rs 1 lakh?
—Tushar Chawla
While filing ITR, information of revenue from all sources, no matter if taxable/ exempt, have to be disclosed. Therefore, despite the fact that LTCG on sale of listed equity shares and units of equity-oriented mutual funds, significantly less than Rs 1 lakh are not taxable, you have to disclose all in ITR 2.
I received Rs 7,000 as LTCG. My other supply of revenue is interest from bank deposits. As it is significantly less than Rs 1 lakh, do I nonetheless have to show it in ITR?
—R Kesavan
You will have to disclose it in the ITR (sale consideration, price of acquisition, and so forth.). The ITR utility shall automatically grant exemption and you shall not be needed to spend tax thereon. Form 26AS consists of all the information pertaining to TDS, tax collected at supply, advance/ self-assessment taxes paid, and so forth. In case of resident taxpayers, extended-term capital gains referred above are not topic to TDS. Therefore, it will not be reflected in Form 26AS. Nevertheless, the division has access to facts relating to transactions in securities.
The writer is director, Nangia Andersen India. Send your queries to