Zero coupon bond - Definition / Legal Terminology - Income Tax

As per clause (48) of section 2 of the Income-tax Act, 1961 - Zero coupon bond means a bond- (a) issued by any infrastructure capital company or infrastructure capital fund or infrastructure debt fund or public sector company or scheduled bank on or after the 1st day of June, 2005; (b) in respect of which no payment and benefit is received or receivable before maturity or redemption from infrastructure capital company or infrastructure capital fund or infrastructure debt fund or public sector company or scheduled bank; and (c) which the Central Government may, by notification in the Official Gazette, specify in this behalf. Explanation 1 - For the purposes of this clause, the expression scheduled bank shall have the meaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause (viia) of sub-section (1) of section 36. Explanation 2 - For the purposes of this clause, the expression infrastructure debt fund shall mean the infrastructure debt fund notified by the Central Government in the Official Gazette under clause (47) of section 10.