In India, for retail investors, sale of bonds are subject to capital gains whilst holding to maturity (assuming cumulative interest) invites income tax on interest component at marginal rates. Right? So, an 8% bond will effectively yield (post tax) about 5.6% on maturity in the 34% tax bracket. If it is trading at a value greater than 5.6% + 10% (capital gains) = 6.16% on a date close to maturity, would it be more tax efficient to sell it?

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