Question Re Taxation of NCD

[capmorgan]

Does anyone know .... ?

For Non Convertible Debentures (NCD's), in demat form, when the interest is to be credited at the end of the term (say 5 years), do I pay income tax on the interest on an accrual basis each year? Or do I pay income tax in the 5th year on the entire interest amount received? I will be holding the NCD for the full term.

Thanks in advance

[dbs]

Tax becomes due on accrual.

You need to account for intt on an annual basis and pay any incom tax due.