The Modi government has launched a new “savings bond scheme” instead of the 8% Savings Bond scheme. Under this scheme, you can buy bonds for at least Rs. 1000/-. You have to invest for 7 years. You will get 7.75% interest on these bonds. Whatever investment you make in this scheme, it will take 9 years to double it.
According to the Central Government, if you invest Rs 1000 in this, then after keeping it for 7 years, you get Rs 1703. There is no maximum investment limit in this scheme. You can buy these bonds from the branches of the authorized bank.
According to the government, all bonds purchased under this scheme are taxable. This means that you will have to pay tax on earnings from the investment. This 7 years Savings Bonds schemes, 2018 scheme will offer a 7.75% return, down from 8% offered earlier.
Features of savings bond scheme
- National Indian can invest alone or jointly, in the name of Hindu Undivided Family (HuF), or under the name of a minor. Overseas investors can not invest in this scheme.
- The issue price of Bond will be 100 rupees. You will have to buy bonds of at least 1000 rupees. If you want to buy more, then you have to buy them at the rate of 1000 rupees.
- There is no limit to the maximum amount of investment.
- You will have to pay tax on these bonds under income tax, but wealth tax will not be counted on this.
- These bonds will have 7 years of maturity period. You will get 7.75% interest on this.
- This interest will be available to you at the half-yearly or annual level.
- TDS will not be deducted at the interest of 10,000 rupees in any one financial year in the government Savings Bond launch only recently. The interest rates on this bond are 7.75%. This is good news for investors of Fixed Income Instruments. These were presented in place of 8% of the year 2003 instead of Saving Bond.
- This bond cannot be traded in the secondary market. Interest can be given on these bonds by adding either the cumulative or without it. Bonds are issued in demat form always and bonds of investor are deposited in the laser account. Certificate of Holding is issued as proof of investment. Interest received from these bonds in the hands of the investor is taxable.