How interest income is taxed
Most listed corporate bond interest is taxed at your slab rate. Tax-free bonds (rare these days) are an exception and remain attractive for investors in the highest brackets.
TDS rules vary by issuer and platform — always reconcile the 26AS / AIS data with your own records before filing.
Capital gains and after-tax yield
Capital gains on listed bonds held over 12 months qualify as long-term and are taxed at 12.5% without indexation under the new regime.
If you're in the highest tax bracket, tax-free bonds and SDLs can sometimes beat AA-rated taxable paper on after-tax yield. Always compare net of tax.