GOI announces launch of 7.75% Savings (Taxable) Bonds, 2018

Government of India has announced the launch of 7.75 per cent Savings (Taxable) Bonds, 2018 commencing 10 January 2018 to offering resident citizens, including Hindu Undivided Families (HUF) a chance to invest in a taxable bond, without any monetary ceiling.

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.

Applications for the bonds in the form of Bond Ledger Account will be received in the designated branches of agency banks and Stock Holding Corporation of India Ltd (SHCIL) in all numbering about 1,600.

The bonds, which will be offered at par, ie, at Rs100, will be issued for a minimum amount of Rs1,000 (face value) and in multiples thereof. Accordingly, the issue price will be Rs1,000 for every Rs1,000 (Nominal).

The bonds will be issued in demat form (Bond Ledger Account) only.

The bonds will be on tap till further notice and issued in cumulative and non-cumulative forms.

There will be no maximum limit for investment in the bonds.

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.

However, these bonds will be exempt from wealth-tax under the Wealth Tax Act, 1957.

The bonds will have a maturity of 7 years carrying interest at 7.75 percent per annum payable half- yearly. The cumulative value of Rs1,000 at the end of seven years will be Rs1,703.

The bonds are not transferable and are not tradable in the secondary market . these are also 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.

Full details of the scheme are available in the Gazette Notification dated 3 January 2018.