Floating Rate Savings Bonds, 2020 (Taxable)
- Government of India has announced to launch Floating Rate Savings Bonds, 2020 (Taxable) scheme commencing from July 01, 2020.
- Eligibility: 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.
- Features: The features of the scheme are given below:
- Applications for the Bonds in the form of Bond Ledger Account will be received in the designated branches only.
For obtaining the list of designated branches, please click here. - The Bonds will be issued in non-cumulative form only. The interest on the bonds is payable semi-annually on 1st January and 1st July every year. The coupon on 1st January 2021 shall be paid at 7.15%. The Interest rate for next half-year will be reset every six months. There is no option to pay interest on cumulative basis.
- There will be no maximum limit for investment in the Bonds.
- 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.
- The Bonds shall be repayable on the expiration of 7 (Seven) years from the date of issue. Premature redemption shall be allowed only for specified categories of senior citizens.
- 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.
- A sole holder or a sole surviving holder of a Bond, being an individual, can make a nomination.
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