Zero Coupon Bond – Section 2(112) | Income-tax Act, 2025 vs 1961

§ 2(112) · Income-tax Act, 2025

Zero coupon bond

ITA 2025 · 2(112) ITA 1961 · 2(48)
Definition — Section 2(112)

Means a bond issued by any infrastructure capital company or infrastructure capital fund or infrastructure debt fund or public sector company or scheduled bank on or after 1st June 2005, in respect of which no payment and benefit is received or receivable before maturity or redemption, and which the Central Government may, by notification, specify.

Act Comparison
Income-tax Act, 2025
2(112)
Zero coupon bond
Income-tax Act, 1961
2(48)
Zero coupon bond
Key Points
  • Maps to Section 2(48) of the 1961 Act — substance identical, infrastructure debt fund explicitly included in both
  • ZCBs are taxed only on maturity/transfer as capital gains or income
  • Holding period 12 months for LTCA classification
💡 Practical Note

Zero coupon bonds don't pay periodic interest — instead they're issued at a discount and redeemed at face value. The entire gain is taxed at maturity as capital gain.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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