Govt to launch 7.75pc Savings Bonds from January 10

1/5/2018

Agencies, New Delhi The government has announced the launch of 7.75% Savings (Taxable) Bonds, 2018. It will open for subscription from January 10 next week. The bonds will have a maturity of seven years. The 7.75% Savings (Taxable) Bonds scheme replaces the 8% Savings Bonds Scheme, also known as RBI Bonds Scheme. The Bond will enable resident citizens and Hindu Undivided family (HUF) to invest in a taxable bond, without any monetary ceiling, a Finance Ministry statement said. “Non Resident Indians are not eligible for making investments in these Bonds,” the statement added. To be issued at par, these bonds will be issued for a minimum amount of Rs.1, 000 (face value) and in multiples thereof in Demat form only. There will be no maximum limit for investment in the Bonds, the statement said. Demat Account or dematerialized account provides the facility of holding shares and securities in electronic format. Outlining its features, the Finance Ministry said Interest on the Bonds, which are non-transferable, will be taxable under the Income-tax Act, 1961 as applicable according to the relevant tax status of the bond holder. The Bonds will be exempt from Wealth-tax and they will have a maturity of 7 years carrying interest at 7.75% per annum payable half- yearly. The cumulative value of Rs. 1,000/- at the end of seven years will be Rs. 1,703. Besides, the Bonds are not tradeable in the Secondary market and are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions, the statement added.

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