Floating Rate Savings Bonds 2020 (Taxable)
The Savings Taxable bonds issued by the government for retail investors can emerge as an investment with a higher rate of interest. Popularly known as RBI Bonds or GOI bonds, they suit anyone looking for highest safety of principal and a regular income.
Eligibility
The Bonds may be held by-
- An individual, not being a Non-Resident Indian-
- in his or her individual capacity, or
- in individual capacity on joint basis, or
- in individual capacity on any one or survivor basis, or
- on behalf of a minor as father/mother/legal guardian.
- A Hindu Undivided Family
How to apply
- Contact Jupiter Investments or fill the Under How to Apply
Payment of Interest
- Non-cumulative (half yearly): The interest on the bonds will be payable at half yearly intervals on Jan 1st and July 1st every year. There is no option to pay interest on cumulative basis.
Tax Concessions
- Interest on the Bond will be taxable under Income-Tax Act, 1961 as amended from time to time & have submitted a true copy of the certificate obtained from Income Tax Authorities.
Nomination
- The sole holder or all the joint holders may nominate one or more persons as nominee.
Nomination facility is not available in case the investment is in the name of a minor.
FAQ’s
Are the Floating Rate Savings Bonds (Taxable) transferable?
No, these bonds are not transferable.
What is the minimum and maximum limit for investment in the Floating Rate Savings Bonds (Taxable)?
The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof. There will be no maximum limit for investment in Bonds.
What is the tenure of the Floating Rate Savings Bonds (Taxable)?
The tenure of the bond is 7 years from the date of issue. No interest will accrue after the maturity of the bond.
Is a nomination facility available?
Yes, a nomination facility is available.
How much tax do I have to pay?
The interest income from the bonds is taxable. TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) is deducted at the time of interest payment as per the prevailing IT rules.
What is the minimum and maximum limit for investment in the Floating Rate Savings Bonds (Taxable)?
The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof.
What is the tenure of the Floating Rate Savings Bonds (Taxable)?
The tenure of the bond is 7 years from the date of issue. No interest will accrue after the maturity of the bond. Premature redemption facility is allowed for investors in the age group of 60 years and above as per RBI’s Notification.
When is the interest payable?
Interest is payable semi-annually from the date of issue of bonds, up to 30th June / 31st December as the case may be, and thereafter half-yearly for period ending 30th June and 31st December on 1st July and 1st January respectively.
Are the Floating Rate Savings Bonds (Taxable) transferable?
No, these bonds are not transferable.
How much interest will the Floating Rate Savings Bonds (Taxable) bear?
The interest rate of the bond, would be re-set half yearly starting with Jan 1st, 2021 and thereafter every July 1st and will be liked with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate. Accordingly, the coupon rate for first coupon period i.e. July 1 to Dec. 31, 2020 payable on Jan. 01, 2021 is arrived at 7.15% (6.80%+0.35%). All subsequent coupon reset would be based on the fixation of rate of interest on NSC on Jan 01 and July 011 following the above methodology.