Maturity proceeds from NCDs attract tax due to long term capital gains. (Photo: Mint)

Revenue earned from NCDs attracts capital positive factors tax or earnings tax?


I had invested 100,000 in non-convertible debentures (NCDs) of Muthoot Finance Ltd in April 2017 and bought 129,538 on maturity in June 2020. For those who may information me on whether or not it can appeal to capital acquire tax or Revenue tax?

-Identify withheld on request

(Solutions by Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital.)

Maturity proceeds from NCDs appeal to tax resulting from long run capital positive factors. The relevant tax is 20% with indexation.

My month-to-month wage is 40,000 and I am serving within the Indian Navy. I’ve accomplished my six years of service. I’m trying ahead to investing my gathered fund which so far is round 10 lakh, on which at the moment I am getting a good rate of interest. Do I have to proceed this fund? Might you please counsel to me some avenues to speculate this quantity and furthermore I can make investments a month-to-month 20,000?

Rakesh Vaidya

It’s advisable to speculate the lump sum quantity ( 10 lakh) in dynamic asset allocation funds as they’ve the flexibleness to change asset allocation between fairness and debt foundation on their relative valuations and therefore present higher risk-adjusted returns. You may equally divide this quantity into ICICI Pru Balanced Benefit Fund and Nippon India Balanced Benefit Fund.

For month-to-month investments of 20,000, it’s possible you’ll put money into equity-oriented mutual fund schemes as a result of fairness as an asset class delivers a superior return over an extended funding horizon. You may consider equally dividing your month-to-month SIP quantity into Axis Development Alternative Fund, Kotak Rising Fairness Fund, IDFC Sterling Worth Fund and UTI Flexi Cap Fund.

(Please ship queries and views to mintmoney@livemint.com.)

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