# Tax on Treasury Bills
**URL:** https://tradingqna.com/t/tax-on-treasury-bills/178306
**Category:** Taxation
**Created:** [January 15, 2025, 2:03pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306 "2025-01-15T14:03:51Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@amar\_nath](https://tradingqna.com/u/amar_nath)
#### Post date: [January 15, 2025, 2:03pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/1 "2025-01-15T14:03:51Z")
Hi Team,
I bought Treasury bills in January for 182 days in January, 2025 and earned interest 20 k.
It will expire in July, 2025 different financial year.
Please let me know which financial year I need to show these interest income? And under which head I need to show?
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### Author:  [@harshareddy](https://tradingqna.com/u/harshareddy)
#### Post date: [January 20, 2025, 11:50am UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/2 "2025-01-20T11:50:20Z")
- **T-bills:** T-bills are bought at a discount and sold at par. The appreciation is considered as STCG and taxed as per the applicable slab rate.
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### Author:  [@cvs](https://tradingqna.com/u/cvs)
#### Post date: [January 20, 2025, 12:35pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/3 "2025-01-20T12:35:52Z")
> [@harshareddy](#):
>
> The income earned from Treasury Bills should be reported under the head **“Income from Other Sources”** while filing your Income Tax Return (ITR).
Ummm… since it is STCG, shouldn’t it be somewhere under Schedule-CG ? 🤔
_(perhaps Section 5.a.c.ii - Full value of consideration in respect of assets other than unquoted shares?)_
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### Author:  [@harshareddy](https://tradingqna.com/u/harshareddy)
#### Post date: [January 21, 2025, 5:50am UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/4 "2025-01-21T05:50:59Z")
Hey @cvs
- If you held the Treasury Bills to maturity, report the income as interest under “Income from Other Sources”
- If you traded them in the secondary market before maturity, any resulting gain or loss would be reported under Schedule CG as Short-Term Capital Gains.
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### Author:  [@cvs](https://tradingqna.com/u/cvs)
#### Post date: [January 21, 2025, 12:10pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/5 "2025-01-21T12:10:51Z")
Thank you for the clarification.
There have been a couple of threads in the past that covered this topic - [[**1**](https://tradingqna.com/t/t-bill-interest-income-tax-section-in-itr-filing/169147)] [**[2](https://tradingqna.com/t/everything-you-need-to-know-about-the-taxation-on-stocks-mutual-funds-and-bonds/141813/13)**].
But, they ended without any references to first-hand information.
(eg. relevant section of the IT-act or circular/notification).
**Knowing this for certain could help simplify ITR-filing for some.**
(eg. folks with no other capital-gain income can stick to ITR-1).
While everyone agrees that the rate of tax on T-Bills, is as per one’s tax-slab,
the opinion is split on which of these 2 sections in the ITR (Schedule OS/CG) should one report the income.
> [@harshareddy](#):
>
> If you held the Treasury Bills to maturity,
> report the income as interest under “Income from Other Sources”
@harshareddy do you have any first-hand references for this?
(eg. relevant section of the IT-act or circular/notification).
or is this based on opinions of experts CAs and what you have observed in-practice?
_(just curious if we can put this topic to rest with an official confirmation)_
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### Author:  [@cvs](https://tradingqna.com/u/cvs)
#### Post date: [January 21, 2025, 6:19pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/7 "2025-01-21T18:19:24Z")
> [@thisisbanerjee](#):
>
> I would appreciate if you could give a definitive answer here in which section to report the income.
As i mentioned above, there is no consensus on this.
> [@thisisbanerjee](#):
>
> All you did was summarise the question and ended it with same question.
Not really @thisisbanerjee.
I was trying to highlight that AFAIK, there is no consensus regarding just one of the points.
The rest are already clarified by harshareddy - Year of taxation (FY-2025-26), and rate of taxation (slab-rate).
Will be useful to finally have a **first-hand official reference** (not just hearsay)
for the proper ITR schedule(s) to disclose income from T-Bills.
> [@thisisbanerjee](#):
>
> Your help is much valued.
Hyperbole/sarcasm like this, isn’t. 🙂
But, hey atleast asked and got the misunderstanding clarified. 👍
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### Author:  [@harshareddy](https://tradingqna.com/u/harshareddy)
#### Post date: [January 23, 2025, 5:41pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/8 "2025-01-23T17:41:32Z")
@Quicko @ShubhS9 Can you help us here?
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### Author:  [@Quicko](https://tradingqna.com/u/Quicko)
#### Post date: [January 28, 2025, 12:15pm UTC](https://tradingqna.com/t/tax-on-treasury-bills/178306/9 "2025-01-28T12:15:07Z")
Hi @harshareddy,
As per our understanding, because you are buying T-bills and then redeeming them (or selling in the secondary markets), the income will be treated as capital gains.
Now, for debt instruments,
- If holding period \> 24 months, gains will be long-term and taxed at 12.5%.
- If holding period \< 24 months, gains will be short-term and taxed at slab rates.
Because T-bills are issued for a maximum period of 364 days, the gains will always be classified as short-term and will be taxed at your applicable slab rate.