Zero-Coupon Security Tax

Tax Glossary Definition

Zero-Coupon Security Tax

Tax on the difference between the issue price and redemption value of a bond or debenture, treated as interest income and taxed either on an annual accrual basis or at maturity, depending on the method of accounting.

Example: Zero-coupon bond issued at ₹90,000 and redeemed at ₹1,00,000 → ₹10,000 deemed interest taxable.

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