A) If I buy an NCD from the secondary market for Rs 1050, and it matures after say 3 months, and pays out Rs 1000 as principal & Rs 100 as interest, how am I taxed?

- Rs 50 short term capital gains
- Rs 100 as interest income & Rs 50 as short term capital LOSS

Different people/CAs seem to be accounting differently, as per my conversations with a few of them. Any definitive answer from anyone?

If your answer is 1), then how would you account for the following scenario (let’s call it B): I buy an NCD from the secondary market for Rs 1050, and it pays Rs 100 interest after say 3 months, and after 15 months, it matures and pays out Rs 1000 as principal & Rs 100 as interest.

Scenario C) could be the same as Scenario B), but instead of Rs 1050, you buy for Rs 950.

Thanks in advance for the replies!