How much tax do you pay on bond investments
All portfolios should be diversified between equity and debt so that the overall risk is controlled. Among debt instruments in India, there are various types of bonds available, with different features-duration, tax benefits, coupon rates and lock-ins. Some types of bonds offer taxation benefits, and some have coupon rates higher than fixed deposit rates. Yet others can be chosen to avoid paying long-term capital gains tax. Take a look at the applicable taxation before investing.