How to invest in nhai bonds details,positive affirmations public speaking zarefsky,ways to make yourself sleep better,most motivational quotes in the world - Plans On 2016

Author: admin, 04.09.2014. Category: Small Goals 2016

Zero coupon bond are issued at lower price than its face value and the principal value is repaid to the holders on the time maturity of bonds. These bonds are being issued as 'Long term specified assets' within the meaning of Explanation (b) to sub-section (3) of Section 54-EC of the Income Tax Act, 1961.
Zero coupon bonds are also known as discount bonds or accrual bond as these are purchased at a large discount on the face value.
Those desirous of availing exemption from capital gains tax under Section 54 EC may invest in these bonds.


It does not make periodic interest(coupon) payments to the bondholders and hence, there are no cash inflows. Capital gains arising from transfer of Long-term capital assets can be invested in these bonds within a period of six months from the date of transfer of the asset for getting exemption from the capital gains tax. The holder of a zero-coupon bond only receives the face value of the bond at maturity which itself acts as interest to holders. Bondholders gain on the difference between what they pay for the bond and the amount they will receive at maturity.


Short-term zero coupon bonds generally have maturities of less than one year and are called bills. Investors can purchase different kinds of zero coupon bonds in the secondary markets that have been issued from a variety of sources, including the U.S.



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