7.75% Savings Bonds Scheme 2018 Launched By Government, Details & Benefits
Government launched 7.75 per cent savings bonds scheme 2018, replacing the 8 per cent savings bonds scheme. The new savings bonds scheme will be open from January 10, 2018. The scheme will enable resident citizens and HUF to invest in a taxable bond, without any monetary ceiling, the Finance Ministry said.
Finance Ministry had put out a statement, saying that 8 per cent GOI Savings (Taxable) Bonds, 2003 shall cease for subscription with effect from the close of banking business on Tuesday, the 2nd January, 2018.
The earlier government had introduced these bonds in 2003 to encourage retail investors to invest. The decision to discontinue the bond comes in the backdrop of declining interest rate in other saving instruments, especially the Post Office small saving schemes.
Details of Savings Bonds Scheme 2018
- 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 SHCIL in all numbering about 1600.
- Bonds will be issued at par i.e. at Rs 100. Bonds will be issued for a minimum amount of Rs 1,000 (face value) and in multiples thereof. Accordingly, the issue price, will be Rs 1,000 for every Rs 1,000 (Nominal). Bonds will be issued in demat form (Bond Ledger Account) only.
- 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.
- 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.
- Bonds will be exempt from Wealth-tax under the Wealth Tax Act, 1957.
- Bonds will have a maturity of 7 years carrying interest at 7.75 per cent per annum payable half- yearly. The cumulative value of Rs. 1,000 at the end of seven years will be Rs 1,703.
- Bonds are not transferable.
- 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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