Why in the news?

Government announced the introduction of 7.75% savings bonds designed to help citizens invest in a taxable instrument.

More about the bonds

• The bonds are open to investment by individuals, including joint holdings and Hindu Undivided Families (HUFs). Non-resident Indians are not eligible to invest in these bonds.
• The bonds will be issued at par, that is, at Rs. 100 and would be issued for a minimum amount of and in multiples of Rs. 1,000.
• There will be no maximum limit for investment in the bonds.
• Interest on the bonds will be taxable under the Income-tax Act, 1961 as applicable according to the relevant tax status of the bond holder. The bonds will, however, be exempt from wealth tax under the Wealth Tax Act, 1957
• The bonds will have a maturity of seven years carrying interest at 7.75% per annum payable half-yearly.
• The cumulative value of Rs. 1,000 at the end of seven years will be Rs 1,703. The bonds are not transferable. 
• The bonds are not tradeable in the secondary market and are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.
• "The bonds will be on tap till further notice and issued in cumulative and non-cumulative forms,” according to a statement from the Centre.

Source

The hindu.