Investment in Securities

(This means Interest on bonds, debentures etc. issued by companies, central government, state government local authority etc.)

If it is Regular Business-Interest Taxable as PGBP

If Not a regular business-Interest Taxable as Income from Other Source

  1. If it is regular business of the assessee to invest in such securities than it is taxable under P.G.B.P otherwise taxable under income from other sources.
  2. If the assessee follows cash basis then interest taxable when received.However if mercantile system is followed then interest is taxable when accrued even though not yet received
  3. Sometime TDS is also deducted at the rate of 10% in this case amount received is net of TDS
  4. Following deductions are allowed
  • Collection charges
  • Interest on loan for purchase of security
  • Other related expenditure

    [However capital expenditure is not allowed as deduction]  

 

 

  1. Income Tax
  2. Income from Other Sources
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Davneet Singh
Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 8 years. He provides courses for Maths and Science at Teachoo. You can check his NCERT Solutions from Class 6 to 12.