CBDT notifies zero coupon bond by HUDCO for purpose of Income Tax:

CBDT notifies zero coupon bond by HUDCO for purpose of Income Tax The Central Board of Direct Taxes on Thursday notified the Ten Year Zero Coupon Bond issued by Housing and Urban Development Corporation Ltd (HUDCO) for the purpose clause (48) of section 2  of Income Tax. Zero-coupon bonds are defined in Income Tax Act in clause (48) of section 2 of Income Tax Act. Rule 8B deals with Guidelines for notification of zero coupon bond. They are also known as deep discount bonds and considered as Capital Asset for the purpose of Income Tax. As per provisions of section 2(42A) of Transfer of Zero-coupon bond is considered as Long term capital gain if done after 12 months and a short-term capital gain if done before 12 months. Long-term capital gains are to be taxed at 12.5% and Short Term to be taxed as per Slab rates. Click here to read the notification