There are expenses associated with the purchase of Bonds(Ex. in Wintwealth). The interest income is taxed at the slab rate. However, I am not sure how to claim the brokerage expenses associated with the bonds. Can you quickly confirm how it can be done for the bonds?
Can the brokerage expenses be claimed for the equity capital gains as well?
Thanks and Regards!!
Hello @Z-User ,
Interest income from bonds, such as those purchased through platforms like Wint Wealth, is taxable under the head ‘Income from Other Sources’ and is subject to tax at applicable slab rates. However, expenses incurred at the time of purchasing these bonds, such as brokerage, platform charges, or stamp duty—are not allowed as deductions from the interest income under this head.
These expenses can, however, be considered while calculating capital gains at the time of selling or redeeming the bonds. Specifically, such costs can either be added to the cost of acquisition or treated as transfer expenses, depending on the nature of the expense. This reduces the net capital gains and accordingly the tax liability under the head ‘Capital Gains’.
Thank you for the explanation. Some of the points are clear to me. I believe with the bonds on Wint Wealth or similar, I think there is no Capital gains(when held till maturity). This is because they pay regular interest and on maturity the Principal amount used to buy the bonds is returned. In this case the Capital Gains are 0. What are the options in this case?
Thanks and Regards!!