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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products

Ms. Kavya Nair holds unlisted bonds of an Indian company bought for Rs 1,00,000 and sold after 10 months for Rs 1,25,000. Assuming the unlisted bond/debenture gain is taxed at her slab rate of 30% as per the current provisions and ignoring cess, what is her tax on the gain?

The tax is Rs 7,500. Gains on unlisted bonds and debentures are treated as short term and taxed at the investor's slab rate. The gain of Rs 25,000 at 30% gives Rs 7,500, ignoring cess.

  1. ARs 7,500Correct
  2. BRs 3,125
  3. CRs 12,500
  4. DRs 0

Explanation

Gain is Rs 25,000. Gains on unlisted bonds and debentures are deemed short-term and taxed at slab rate irrespective of holding period. 30% of 25,000 = 7,500. Rs 3,125 wrongly uses 12.5%.

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