Canara Robeco Balance - INVEST :: Business Line

Choosing bonds in secondary markets :: Business Line

There has been plenty of action in the bond market in recent weeks, with a number of new tax-free bonds hitting the market. What has added to the euphoria is the high coupon rate these bonds offer, thanks to the rising yield on the 10-year G-Sec, to which all these bonds are linked. There have also been other bond issues (taxable) by companies through non-convertible debentures, which have offered attractive rates.

Look to the secondary market

The easiest way to invest in these bonds is to subscribe at the time of the issue. However, there is no guarantee of allotment, as some of the issues get fully subscribed on the opening day itself. In such a scenario, the secondary market offers yet another avenue to buy bonds. For existing investors too, it is important to track the performance of their bonds in the secondary market.

This is because switching to other bonds may at times provide better returns, although most investors prefer to hold till maturity. Here’s what you should know when trading in the secondary markets:

30 Oct -Tax Talk :: Business Line

 

1. I have decided to buy a home for which the loan application is in process. We would like to let out the property as we are staying in my in-laws house, in the same city where we are buying the property - Bangalore. Now, can I claim interest exemption on the home loan interest if I expect the possession of the property in the current FY 2013-14?

- Kiran

Response:

As per the provisions of the Income-tax Act, 1961, deduction for interest payable on the home loan can be claimed under the head “Income from house property” once construction is complete and possession is taken. In your case, you will get the possession of the property in FY 2013-14, hence you will be able to claim deduction of home loan interest payable, in your tax return for FY 2013-14. The deduction is limited to Rs. 150,000 in the case of self occupied property or property not occupied due to employment somewhere else. However where the property is let out, the above limit is not applicable i.e. in your case, you can claim deduction of the entire home loan interest payable for the FY 2013-14 against the rental income.