Taxation on infrastructure bonds bought in 2011/12

Tax queries 811 views 2 replies

Ramakrishna C

Finance Professional

32 Points Joined September 2015

I bought L&T Infrastructure bonds (Series 2011B) worth Rs 20,000 in Jan 2012. I exercised the 7 year buyback option and got a net consideration of Rs 34,905 in Jan 2019 (total value Rs 36,561 less 10% TDS of Rs 1656). My queries are:

1) Whether this should be classified as Income of other sources or Income from Capital Gains for the year FY2018-19?

2) If it is Capital Gains, whether indexation benefit is available or not ?

3) Which fields/section needs to be filled in ITR 2 for this transaction?

Thanks in advance !

Replies (2)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208059 Points Joined July 2016

1. Being cumulative in nature, the interest earned over these bonds is to be offered u/h. IFOS. (TDS of 10% deducted u/s. 194A).

2. & 3. not applicable.

Suresh Thiyagarajan

Student

3986 Points Joined July 2018

1. According to sec 10(47), any income infrastructure debt fund set up by the Central Government alone will be exempt from payment of tax.
2. In your case, it is an L&T infra bond and whatever the income earned on buyback of such bond will be subject to tax under the head Income from Other Sources.
3. I don't think there will not be any deductions available u/s 57 with respect to the above interest income.
4. Interest column in ITR -2 be just filed. If it is possible to specify the nature of the bond, do specify.
Please correct me if the above solution has an alternative view.