The Floating Rate Savings Bonds, 2020

Jun 29, 2020 | by Avantis RegTech Legal Research Team

Finance & Taxation Compliance

The Department of Economic Affairs on June 26, 2020 launches the Floating Rate Savings Bonds, 2020 (Taxable) with effect from July 01, 2020. The Bonds will be issued only in the electronic form and held at the credit of the holder in an account called Bond Ledger Account (BLA). The bond will also ascertain the rights and duties of the investor.

Some of the key points of the bond are as follows:

 The Floating Rate Savings Bonds 2020 (FRSB Bonds) will have tenure of 7 years and the interest rate will keep varying during the tenure of the scheme.

 The minimum investment amount is Rs 1000, while there will be no maximum limit for investments made in the Bonds. The maximum investment in cash can be made up to Rs 20,000.

 The resident Indians or HUF can invest in the FRSB taxable bond, without any monetary ceiling. The Bonds will be on tap till further notice and issued in non-cumulative form only. Premature redemption shall be allowed for specified categories of senior citizens.

 Interest on the Bonds will be taxable under the Income-Tax Act, 1961 as amended from time to time and as applicable according to the relevant tax status of the Bond holder. There will be an incidence of TDS unless certificate of exemption is provided to not deduct TDS.

 The Bonds are open to investment by individuals and Hindu Undivided Families. However, NRIs are not eligible for making investments in these Bonds.

 The Bonds will be issued, in electronic form and credited to the Bond Ledger Account (BLA) of the investors on the date of the tender of cash or the date of realization of draft, cheque, funds.

[Notification No. S.O. 2123 (E)]


Related Updates

Alternate Text

Get updates on the go on RuleZbook Mobile App.