Case Law Analysis
|Income Tax Appellate Tribunal
Section 2(28A) IT Act | Broken Period Interest on NCDs Sold Before Maturity Taxable as Interest Income, Not Capital Gain: ITAT Delhi
The ITAT Delhi has ruled that interest earned on non-convertible debentures during the broken period between purchase and sale-paid by the buyer, not the issuer-constitutes interest income under 'Income from Other Sources', not capital gains. This clarifies a critical tax treatment for institutional investors trading NCDs in secondary markets, preventing misclassification that could distort tax liability and compliance strategies.