Taxation of Market Linked Debentures reclassified as short-term capital gains taxed at applicable rates under new provision.

The proposal inserts a new provision treating gains on transfer, redemption or maturity of Market Linked Debentures as short-term capital gains taxable at applicable rates by treating the full consideration received, reduced by cost of acquisition and transfer-related expenditure, as capital gains from a short-term capital asset; it also defines Market Linked Debentures as debt-principal securities with returns linked to market returns or so classified by the market regulator and makes the change prospective.

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