Bonds, by definition, are debt instruments, investing in which gets you a fixed interest. Either you get the entire interest on maturity of the bond, or you could get it at regular intervals. It varies depending upon the type of the bond, and investor preference. However, it is advisable to not withdraw interest at regular intervals, as it would add to the Principal deposited, thus increasing your maturity amount.
The government issues bonds to finance its expenditure requirements. Both Central and State governments can issue government bonds in India. The government issues a variety of bonds -- Fixed Rate, Floating Rate, Zero Coupon and Capital Indexed, among others.
Why you should invest in them
● These are gilt-edged investments, i.e. they carry practically no risk of default.
● They are long-term securities. Once you invest, you don’t have to monitor constantly.
● The interest is paid at regular intervals, usually half-yearly.
However, out of all governments bonds in India, it is the Capital Gains Bonds that India prefers most. This is because they substantially save tax when you conduct property transactions. These bonds are issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL).
You can invest a maximum total of Rs. 50 lakh in them. By investing in these bonds within 6 months of your property sale, instead of attracting tax, your investment gets an exemption under Section 54 EC.
The government issues bonds to finance its expenditure requirements. Both Central and State governments can issue government bonds in India. The government issues a variety of bonds -- Fixed Rate, Floating Rate, Zero Coupon and Capital Indexed, among others.
Why you should invest in them
● These are gilt-edged investments, i.e. they carry practically no risk of default.
● They are long-term securities. Once you invest, you don’t have to monitor constantly.
● The interest is paid at regular intervals, usually half-yearly.
However, out of all governments bonds in India, it is the Capital Gains Bonds that India prefers most. This is because they substantially save tax when you conduct property transactions. These bonds are issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL).
You can invest a maximum total of Rs. 50 lakh in them. By investing in these bonds within 6 months of your property sale, instead of attracting tax, your investment gets an exemption under Section 54 EC.
0 comments: