Explained: What RBI discontinuing 7.75% saving bonds means to investors

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News: Government of India has discontinued the 7.75% savings (taxable) bonds,2018 for subscription.

Facts:

  • The 7.75% Savings(Taxable) Bonds,2018 were issued with effect from January,2018.
  • Eligibility: The bonds were available for subscription to resident citizens/Hindu Undivided Family (HUF) to invest in a taxable bond.
  • Investment: The minimum investment in this bond starts at Rs 1,000 with no maximum limit.
  • Duration: The bonds had a 7-year lock-in period from the date of issue but it permitted premature encashment to individuals who were 60 years and above.
  • Interest on these bonds was taxable under the Income-tax Act,1961.