Frequently Asked Questions
Who Can Invest?
Any Individual, HUF, Partnership Firm, LLP, Private Limited Companies, Charitable and non Charitable Trust , Society, AOP.
What Document Required For Individual Investment?
1) Pan Card 2) Adhar Card 3) Cancel Cheque 4) Nominee Pan 5) Client Master Report / Letter
How Can I Make The Payment ?
2 Ways of Making Payment : 1) Add beneficiary and make payment 2) Go to the bank and make NEFT / RTGS
What is Yield?
The yield is the effective interest rate on bonds. The yield will vary inversely with the market price of the Bond. Yield= (Coupon/ Market Price of Bond) X 100
What is Coupon Rate?
Coupon rate is the interest rate paid by fixed-interest security such as Bond/ Debenture. It is the annual payment towards the face value of a bond. The bond issuing company pays it to the bondholder.
Will I get any Physical Certificate Of the Investment?
No, As the investment which we are making is in Demat Form so the bond will reflect only in Demat Account Which you Have presented at the time of Kyc Registration.
After doing an investment, within how many days it get credit into Demat Account?
It gets credited into Demat Account on T+1 Basis.
When and Where Interest will Get Credit?
Your interest will get credit into the bank account which you have registered at the time of KYC registration. And the payment is made as per Frequency of the Investment.
What is the Lock In Period ? What if i want to exit the investment before maturity?
Lock in Period of any securities would always be mentioned in the securities. In case of early maturity, you can exit we any buyers are available in the Secondary Market.
Whether Bonds are Transferable?
Yes, All Secondary Bonds are Transferable.
Is there is any extra benefit to Senior Citizens?
No, There is no change in coupon rate, Yield rate, IRR for senior citizens.
Explain differences between Secured Bonds and Unsecured Bonds.
Secured Bonds are bonds that are collateralized by an issuer's asset or future cash flows. If the issuer defaults, then bondholders can claim the asset or the cash flow generating source. Unsecured Bonds don’t come with any collateral. If the issuer defaults, unsecured bondholders can't claim any of the issuers' assets. Here investment decision is taken purely on trust on the issuer and credit history of the issuer. During bankruptcy, secured bonds are paid before unsecured bonds.
Are highly safe bonds taxable?
Yes, interest income from highly safe bonds is typically taxable at the federal and state levels, although certain types of government bonds may be exempt from state and local taxes.
What is the tax rate on the interest earned from bonds?
Interest earned on bonds issued by companies is subject to a 10% TDS ( Tax Deducted at Source ) for Individuals/HUF and other entities. TDS is only applicable to bonds issued by companies. Government bonds such as sovereign gold bonds are exempt from the TDS provision.
Can individuals get tax exemption or lower tax rates on the interest earned from bonds?
Individuals who are Indian residents and have a tax exemption or are subject to lower tax rates (less than 10%). Individuals can submit either Form 15G (if they are below 60 years of age) or Form 15H (if they are 60 years of age or older) to avoid deduction of tax at source.
Are returns earned from my bond investment taxable?
For interest earned from Taxable Bonds, the earnings are taxable. For interests earned from Tax-Free Bonds, the earnings are 100% tax-free. Also, capital gains earned from selling any Bond (taxable and tax-free) before maturity are subject to capital gains taxation rules.
Are Government bonds tax-free?
The interest earned by the G-Secs/SDLs is taxable and is taxed under the relevant tax slab of the bondholder as per the current tax norms.
Is corporate FDs taxable?
Yes, interest from corporate FDs that is gained over Rs 5,000 a year is taxable, and the interest is paid after TDS has been deducted. The earnings will be included in your income, and taxes will be deducted in accordance with your tax brackets.
What are the tax implications for NRIs investing in NRI eligible bonds?
When NRIs sell their bonds, a tax rate of 10% will apply if the gain on the sale exceeds Rs 1 lakh. Nevertheless, if the gain on sale is less than Rs 1 lakh, the gain will be exempt from tax provided that the Securities Transaction Tax (STT) is paid for acquiring and selling equity shares.
Can an NRI invest in Indian Bonds and NCDs?
Yes, as per RBI norms, NRIs can invest in the Indian Bond Market. However, please note that not all Bonds are eligible for investment by NRIs. To access Bonds that are ‘NRI Eligible,’ investors can check the ‘NRI Eligible Bonds’ collection
