Bonds
A bond is a debt instrument in which an investor loans money to an entity (typically corporate or government) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money to finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer.
Capital Gains Bonds
Capital Gains Bonds are those instruments that allow you to transfer your gains from long term assets such as land and house property into specific bonds.
The most significant advantage of investing in such a bond is that it offers you tax exemption from Capital Gains Tax under Section 54EC of the Income Tax Act, 1961, for up to 6 months from the sale of the asset sold.
It means that an individual need to invest in capital gains bonds within 6 months from the transfer of capital assets
Corporate Bonds
These are bonds issued by various corporates for their financing needs and hence carry credit risk. The holder of the bonds earns regular interest income. and principal amount at maturity. Corporate bonds pay higher interest than Bank FD’s and Government bonds.
RBI Bond
The Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families/charitable institutions/universities.
The Bonds will have a maturity of 7 years carrying interest at 7.15% Floating per annum payable half-yearly.
The Bonds will be issued in non-cumulative form only.
There will be no maximum limit for investment in the Bonds.
