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.