Rule – 8B, Guidelines for notification of zero coupon bond
March 14, 2018
Rule – 8D, Method for determining amount of expenditure in relation to income not includible in total income
March 14, 2018

Rule – 8C, Computation of pro rata amount of discount on a zero coupon bond for the purpose of clause (iiia) of sub-section (1) of section 36

8C. For the purposes of clause (iiia) of sub-section (1) of section 36, the pro rata amount of discount on a zero coupon bond shall be computed in the following manner, namely:—

(a) the period of life of the bond shall be converted into number of calendar months and, for this purpose, where the calendar month in which the bond is issued or the bond matures or is redeemed contains a part of a calendar month then, if such part is fifteen days or more than fifteen days, it shall be increased to one calendar month and if such part is less than fifteen days it shall be ignored;
(b) the amount of discount shall be divided by the number of calendar months determined in accordance with clause (a);
(c) where one or more than one calendar month out of calendar months determined in accordance with clause (a) is or are included in a previous year, the amount determined in accordance with clause (b) shall be multiplied by the number of calendar months so included and the amount so arrived at shall be taken to be the pro rata amount of discount for that previous year.

Reference: www.incometaxindia.gov.in

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