1.RBI Floating Rate Savings Bonds

After discontinuing its 7.75% fixed interest rate bonds on the 28th May 2020, the RBI has come out with its new “floating rate savings bonds” on 26th June 2020, which will be available from 1st July 2020.
Key Highlight

• Minimum- Rs. 1,000 , Maximum – No Limit
• The interest on the bonds is payable semi-annually on 1st Jan and 1st July every year.
• The coupon on 1st January 2021 shall be paid at 7.15%.
• The Interest rate for next half-year will be reset every six month
• There is no option to pay interest on cumulative basis
• Interest on these bonds will be taxable under the Income-tax Act, 1961.
• The Bonds shall be repayable on the expiration of 7 (Seven) years from the date of issue

2.Capital Gain Bonds 54EC:-

You can claim tax exemption on long-term capital gains (LTCG) arising from transfer of capital assets like real estate and gold if you reinvest the gains in capital gains bonds specified under Section 54EC of the Income-tax Act, 1961. You need to reinvest the gains in these bonds within six months of the asset’s transfer. Also, the exemption is proportionate to the LTCG invested. If the investment is less than the LTCG realized, only proportionate gains would be tax-exempt.
Key Features

• Safe and Secure: 54EC bonds are AAA rated.
• Interest: Interest on 54EC bonds is taxable. No TDS is deducted on interest from 54EC bonds and wealth tax is exempted.
• Tenure: 54EC bonds come with a lock-in period of 5 years (effective from April 2018) and are non-transferable.
• Investment amount: Minimum investment in 54EC bonds is 1 bond amounting to Rs. 10,000 and the maximum investment in 54EC bonds is 500 bonds amounting to Rs 50 lakhs in a financial year.
• Interest Rate: 5.00% p.a.
• Interest payable annually.