Interest on Securities

Interest on Securities

Interest on Securities: Interest on securities can be defined as the sum of interest paid or payable for securities issued by Government organizations or securities approved by Government or companies or other organization. It is the asset of a client for whom an intermediary holds securities on an unallocated basis, commingled with the interests in securities of other clients.

Different classes’ securities –

Securities may be classified into two categories;

  1. Governmental securities.
  2. Commercial securities.

This may again be classified into two categories;

  1. Tax-free securities.
  2. Less tax securities.

Tax free securities: Securities issued by the government and declared as tax free is called tax free government securities.

Less tax Govt. securities: Both commercial Government securities become usually “less tax” unless they are declared as “tax-free” by the concerned authority.

Tax free commercial securities: Securities issued by commercial enterprise and declared as tax free is called tax free commercial securities.

Less tax commercial securities: Securities on which the issuing companies deduct tax at source and pays net amount to the security holders are called less tax commercial securities.

Interest on debenture: Interest paid or payable on debenture is debenture interest.

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