Capital gains/losses will arise if I sell bonds before maturity, but does this also happen if I hold them to maturity? For example, with a typical GSec bond with face value of Rs. 100, if I buy a bond at Rs. 100.4, do I get to declare Rs. 0.4 as a short term capital loss if I hold it to maturity (<1 year holding period).
There are special mentions of deep discount bonds in the Indian tax laws where difference in the bid price and redemption price are treated as capital gains (see https://incometaxindia.gov.in/Communications/Circular/910110000000000370.htm). Does this also hold in this case where the bonds have been purchased at a premium and I should be allowed to declare a capital loss?