Is there any capital gain tax on investment in NCD?

Yes, an investor is liable to pay short-term and long-term capital gain tax on NCD investment.

If an investor sells NCDs within 12 months from the date of allotment, the profits earned is called short-term capital gain and charged as per the income tax slab rate of assessment.

However, when an investor sells NCDs on the exchange after a period of 12 months, the profits derived from the sale of NCDs are called long-term capital gain. Such profits are charged at 10% LTCG tax without indexation or 20% tax with indexation, whichever is lower.