Capital gains tax waiver for Bond and Debenture holders

The government will treat bonds and debentures as a single security for calculating the holding period without factoring in the conversion date, a decision that could make investors eligible for long-term capital gains tax exemption. Thus, the holding period for the long-term capital gains tax will be from the date a debenture or bond is acquired and not from the day the debenture is converted to shares. The Central Board of Direct Taxes has amended the rules dealing with the issue. The new regime will come into effect from April 1.