Key Information:Launched on: 5th January 2018
Commenced from: 10th January 2018
Launched by: Government of India and Reserve Bank of India
Inaugurated by: Union Finance minister, Arun Jaitley
Maturity period: 7 years
Replaces to: 8% savings Scheme
- To help citizens invest in a taxable instrument, without any monetary ceiling.
- This will facilitate resident of Indian or Hindu Undivided Families (HUF) to invest in a taxable bond, without any monetary ceiling.
- 7. 75% savings (Taxable) bond scheme is jointly launched by the Government of India and Reserve bank Of India.
- This scheme will replace old 8% savings bond scheme which was closed on 2nd January 2018 and this new scheme will start subscription from 10th January 2018.
- This 7. 75% savings (Taxable) bond scheme will give a steady flow of income although there is a lower rate of interest.
Highlights of the Scheme
- In this bond scheme, only Indian resident can make investment means NRIs are not eligible to invest in this bond scheme and issued only in DEMAT form.
- 7. 75% savings (Taxable) bond is non-transferable means a bondholder cannot transfer power to anyone else and cannot sell it on the secondary market.
- This bond has a minimum subscription face value of Rs 1000 and multiplication of it.
- There is no maximum limit for investment set by the central government it means an investor can invest up to any amount.
- One can invest individually or with a partner like joint investment and HUFs.
- This savings bond scheme has a maturity period of 7 years with interest rate 7.75% which is calculated and paid on a half-yearly basis. there are two types of interest getting methods like one is
- Cumulative and non-cumulative and an investor is free to choose anyone from this two.
- In a Cumulative method, an investor will pay at the end of the maturity period of a bond and in a non-cumulative method; an investor will be paid half- yearly.
- These bonds are exempted under the Wealth Tax Act, 1957 and interest on this bond scheme are taxable under the income tax Act, 1961.
- An investor is able to use these bonds as security to get a loan from the financial Institution like bank, NBFCs or any other.
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