Bonds

Fixed Income

Floating Rate Savings Bonds, 2020 (Taxable)

The government has launched Floating Rate Savings Bonds, 2020 (Taxable) with an interest rate of 7.15 per cent. The bonds are available for subscription July 1, 2020 onwards. The interest rate on these bonds will be reset every six months, the first reset being on January 01, 2021

 

SALIENT FEATURES
  • Eligibility for Investments
    The Bonds may be held by An individual, not being a Non-Resident Indian (NRI) , A Hindu Undivided Family.
  • Limit of Investment
    There will be no maximum limit for investment in the Bonds.
  • Tax Treatment
    Interest on the Bonds will be taxable under the Income-tax Act, 1961as amended from time to time and as applicable according to the relevant tax status of the Bonds holder.
  • Issue Price
    The Bonds will be issued at par at Rs.100/-for a minimum amount of Rs.1000/- (face value) and in multiples thereof.
  • Date of Issue
    The Bonds will be issued, in electronic form and credited to the Bond Ledger Account (BLA) of the Investor/s on the date of the tender of cash or the date of realization of draft/cheque/funds.
  • Subscription
    Subscription to the Bonds will be in the form of Cash (uptoRs.20,000 only)/drafts/cheques or any electronic mode acceptable to the Receiving Office
  • Nomination
    A sole holder or all the joint holders (investors) of Bonds, being individual/s, may nominate in Form C or as near thereto as may be, one or more persons who in the event of death of sole holder / joint holder, as the case may be, would be entitled to the Bonds and to the payment thereon.
  • Transferability
    The Bonds in the form of Bond Ledger Account shall not be transferable except transfer to a nominee(s)/legal heir in case of death of the holder of the bonds.
  • Interest Rate (Floating)
    The interest on the bonds is payable semi-annually on 1st Jan and 1st July every year.

    • The interest on the bonds is payable semi-annually on 1st Jan 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, the first reset being on January 01, 2021.
    • 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, the first reset being on January 01, 2021. There is no option to pay interest on cumulative basis.
  • Tax Deduction at Source
    Tax deducted at source while making payment of interest on the bonds from time to time and credited to Government Account.

    • Tax deducted at source while making payment of interest on the bonds from time to time and credited to Government Account.
    • Provided that tax will not deducted while making payment of interest/maturity proceeds as the case may be to individual/s who have made a declaration in the application form that they have obtained exemption from tax under the relevant provisions of the Income Tax Act, 1961 as amended from time to time and have submitted a true copy of the certificate obtained from Income Tax Authorities.
  • Repayment/Tenor
    The Bonds shall be repayable on the expiration of 7 (Seven) years from the date of issue.