Government of India has announced to launch 7.75% Savings (Taxable) Bonds, 2018 commencing from 10th January 2018 to enable resident citizens/HUF to invest in a taxable bond, without any monetary ceiling. The main features of the Bonds are: | (i) Who can invest: | The Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families. NRIs are not eligible for making investments in these Bonds. | | (ii) Subscription: | Applications for the Bonds in the form of Bond Ledger Account will be received in the designated branches of agency banks and SHCIL in all numbering about 1600. | | (iii) Issue Price: | The Bonds will be issued at par i.e. at ₹ 100.00 per cent. | | The Bonds will be issued for a minimum amount of ₹ 1000/- (face value) and in multiples thereof. Accordingly, the issue price, will be ₹ 1000/- for every ₹ 1,000/- (Nominal). | | The Bonds will be issued in demat form (Bond Ledger Account) only. | | (iv) Period: | The Bonds will be on tap till further notice and issued in cumulative and non-cumulative forms. | | (v) Limit of investment: | There will be no maximum limit for investment in the Bonds. | | (vi) Tax treatment: | Income-tax: Interest on the Bonds will be taxable under the Income-tax Act, 1961 as applicable according to the relevant tax status of the bond holder. | | Wealth tax: The Bonds will be exempt from Wealth-tax under the Wealth- tax Act, 1957. | | (vii) Maturity and rate of interest: | The Bonds will have a maturity of 7 years carrying interest at 7.75% per annum payable half- yearly. The cumulative value of ₹ 1000 at the end of seven years will be ₹ 1703/-. | | (viii) Transferability: | The Bonds are not transferable. | | 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. | | (ix) Nomination: | A sole holder or a sole surviving holder of a Bond, being an individual, can make a nomination | Full details of the scheme are available in the Government Notification dated 3rd January 2018. Ajit Prasad
Assistant Adviser Press Release: 2017-2018/1826 | |