RBI - 7.75% Savings (Taxable) Bonds, 2018
Eligibility for Investment
The Bonds may be held by:
- ✅ An individual, not being a Non-Resident Indian
- ✅ In individual capacity, or jointly
- ✅ On behalf of a minor as a father/mother/legal guardian
- ✅ A Hindu Undivided Family (HUF)
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, 1961 as applicable according to the relevant tax status of the Bond holders.
- 📌 The Bonds will be exempt from wealth-tax under the
Wealth Tax Act, 1957.
Transferability
The Bonds held to the credit of Bonds Ledger Account of an investor shall not be
transferable.
Interest
- 💰 The Bonds will be issued in Cumulative or
Non-cumulative form, at the option of the investor.
- 💰 Interest rate: 7.75% per annum
- 💰 Non-cumulative Bonds: Interest payable at half-yearly
intervals.
- 💰 Cumulative Bonds: Interest is compounded half-yearly
and paid on maturity along with principal.
- 💰 Maturity Value: Rs. 1,703.00 for every Rs. 1,000/-
invested.
Tax Deduction at Source (TDS)
- ✅ TDS will be deducted while making interest payments on
Non-Cumulative Bonds.
- ✅ Tax on the interest portion of Cumulative Bonds will be
deducted at the time of maturity.
- ✅ No TDS deduction if an individual submits a valid tax
exemption certificate.
Repayment & Premature Encashment
- 📆 The Bonds shall be repayable after 7 years from the
date of issue.
- 📆 Premature encashment is allowed for investors aged 60
years and above:
- ✔️ 60 to 70 years: Lock-in period of 6 years.
- ✔️ 70 to 80 years: Lock-in period of 5 years.
- ✔️ 80 years and above: Lock-in period of 4 years.
