Features

RBI Floating Rate Savings Bonds, 2020 (Taxable) is an attractive investment option in fixed income side.

• 100% Risk-Free Investment
• Minimum investment : INR 1,000

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

• Interest Payout : Half Yearly
• Tenure: The tenure of the bond is 7 years from the date of issue.
• Premature redemption facility: is allowed for investors in the age group of 60 years and above as per RBI’s Notification
• ROI: The interest rate of the bond would be re-set half yearly, rates are linked with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.

Example: The coupon rate 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 01 following the above methodology

Tax free bonds are securities issued by a company, financial institution or the government, wherein the interest is fully exempted from the Income Tax and shall not form part of the Total Income as per provisions under section I.T. Act, 1961., In general these bonds are government-backed entities or public undertakings, such as IRFC, PFC, NHAI, HUDCO, REC, NTPC, NHPC & they provide regular or fixed payment of interest in return for borrowed money for a specified period

Features

• Tenure: You can invest for up to 10, 15, or 20 years – it’s your choice.
• Liquidity: You can easily sell your bonds any time before maturity.
• Safe investment option: You can be sure of receiving the promised regular interest.
• Tax-exempted: You are not required to pay any taxes on the interest you earn.
• Demat account is optional: You can hold these bonds in physical form, too.

Non-convertible debentures (NCDs) are a financial instrument that is used by companies to raise long-term capital. NCDs are a debt instrument with a fixed tenure, issued by a company wherein a company agrees to pay a fixed rate of interest on your investment for a specified period in order to raise money from market for business purposes. As the name suggests, these debentures cannot be converted into shares of issuing company unlike convertible debentures. Interest on NCDs is paid at different time period like quarterly, semi-annually or annually. They also have an option of cumulative interest in which case interest is cumulated & paid on maturity

An NCD can be secured or unsecured. Secured NCDs are backed by the issuer company's assets to fulfill the debt obligation unlike unsecured NCDs. The NCD issues are rated by credit rating agencies like CRISIL, ICRA, FITCH, and CARE to ensure the company's ability to service the debt on time & lower default risk.

• Listing of NCDs on exchanges like NSE & BSE provides liquidity to your investments
• No tax Deducted at Source (TDS) on listed debentures
• Investment tenure ranging from 2 to as much as 20 years provides you with ample options to fulfill your financial goals
• Unlike FDs, NCDs have limited lock-in period which makes them attractive as far as liquidity is concerned
• Ratings by agencies like CARE, FITCH, CRISIL, ICRA enables you to assess the quality of debt papers before investment
• Option of holding bonds in 'Demat Form' makes your investments easy to handle & monitor

As the name suggests, Sovereign Gold Bonds are government securities (G-Sec) issued by the Reserve Bank of India (RBI).Sovereign Gold Bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay issue price in cash and the bonds will be redeemed in cash on maturity. The bond is issued by Reserve Bank Of India on behalf of Government of India

Whether it is to diversify your portfolio, or to ensure you have an investment which will reap you a fixed income, SGBs are here to provide you an alternative.

• Capital appreciation : linked to gold prices.
• Additional interest : 2.50% per annum.
• Exemption from capital gains tax: if bonds are held till maturity.
• Hassle free: Ownership of gold without any physical possession (No risks and no cost of storage)
• Tax treatment: The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
• Tradability: Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
• Transferability: Bonds shall be transferable by execution of an Instrument of transfer in accordance with the provisions of the Government Securities Act.

Those who have capital gain can look for exemption tax under Section 54 EC may invest in these bonds. Such Bonds are issued by PFC ,SIDBI, NHB, NHAI and REC.

Capital Gains Bond under Section 54EC of the Income Tax Act, 1961. These bonds are being issued as 'Long term specified assets' within the meaning of Explanation (b) to sub-section (3) of Section 54-EC of the Income Tax Act, 1961.

• Tax Benefit: On capital gain
• Maximum investment limit : Rs. 50 Lakhs in a Financial Year across the two available Bonds
• Higher interest rate : 5.00% interest per annum
• Higher Saftey : PSU Bonds