Bonds are generally secured by the collateral or physical assets of the issuing company. Debentures are unsecured and are not backed by any collateral. The creditworthiness and reputation of the issuer play a key role in backing.
Welcome to our Capital Gains Bond - SEC 54 EC product page. We offer a comprehensive investment solution designed to help you save on capital gain taxes while securing attractive returns.
Capital Gains Bond
Long-term capital gain is the gain that is derived out of a sale of an asset (Land or Building) that has been held for more than two years. You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the date of sale of the asset. 54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax arising out of sale a capital asset.The maximum limit for investing in 54EC bonds is Rs. 50,00,000. The eligible bonds under Section 54EC are REC (Rural Electrification Corporation Ltd), PFC (Power Finance Corporation Ltd), and IRFC (Indian Railways Finance Corporation Limited).
To claim Section 54 EC following conditions is to be satisfied.
1. Long Term Capital Asset Long term assets means any capital asset held by assessee for more than 3 Years.
2. If assesee has sold the Long term capital asset during the previous year and made a long term capital gain then he can invest money of capital gain in Capital gain bonds and can save tax on long term capital gain.
3. Assessee here means all type of assessees,like individual,firm company etc.
4. Amount to be invested in bonds is only capital gain not net consideration received on sale of long term capital asset
5. Amount exempted under this section will be amount of capital gain or amount invested in capital gain bond which ever is lower maximum up to 50Lakh(see note below)
6. These Bonds Maturity Period is Three years
7. Capital gain bonds eligible under this section are now can be issued only by REC or NABARD
8. Bonds can not be pledged ,sold transfer before completion of three year from purchase of bonds ,and in case its transferred then amount capital gain exempted on investment in these bonds will be made taxable in that previous year as Long term capital gain .
9. Amount of capital gain should be invested in Capital gain bond within 6 Month from date of transfer/sale of capital asset .
One more good news for you that 50 lakh Limit is for each financial year. As your six month limit is fall in two different Financial years so you can save 50 lakh in fy 2008-09 and 50 lakh in 2009-10.so one can save upto maximum of one crore of capital gain u/s 54EC.
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
Sovereign Gold Bond
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
Eligibility:
Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors with subsequent change in residential status from resident to non-resident may continue to hold SGB till early redemption/maturity.
Floating Rate Savings Bonds, 2020 was launched by the Government of India and it has been effective since 01-July-2020.
FRSB stands for Floating Rate Savings Bonds, 2020.
The Floating Rate Savings Bonds is a type of Bond in which the interest rate (coupon rate) will be revised by the Government every 6 months. So, the interest (coupon) amount you receive will also change every 6 months. Because of this reason, this bond got the name "Floating Rate".
This floating interest rate (coupon rate) is applicable for both old and new investors.
There is no cumulative (compounding) option in this bond. It means that the interest will not compound in this scheme. Only the interest payout option is available. So, you have to receive the interest every 6 months.
Public Sector Undertaking Bonds (PSU Bonds) are the bonds in which the government shareholding is generally more than 51%. It is a medium and long-term debt instruments issued by public sector companies.
Public Sector Bonds
Public Sector Undertaking Bonds (PSU Bonds) are the bonds in which the government shareholding is generally more than 51%. It is a medium and long-term debt instruments issued by public sector companies.
Checking the credit rating and nature of bonds is always recommended. Make sure the credit rating, Investment nature, underlying security, and maturity aligns with your investment needs. PSU Bonds are considered a secure option for investment.
Features :
Higher interest rate than FDs.
Generally, these bonds are taxable as per individual income tax slab.
Low default risk as they backed by the Government.
Corporate bonds are debt obligations issued by corporations to fund capital improvements, expansions, debt refinancing, or acquisitions. Interest is subject to federal, state, and local taxes.
Corporate Bonds And Debentures
Corporate bonds are debt obligations issued by corporations to fund capital improvements, expansions, debt refinancing, or acquisitions. Interest is subject to federal, state, and local taxes. To understand bonds, it is helpful to compare them with stocks. When you buy a share of common stock, you own equity in the company and will receive any dividends declared and paid by the company. When you buy a corporate bond, you do not own equity in the company.
You will receive only the interest and principal on the bond, no matter how profitable the company becomes or how high its stock price climbs. But if the company runs into financial difficulties, it still has a legal obligation to make timely payments of interest and principal. the company has no similar obligation to pay dividends to shareholders. In a bankruptcy, bond investors have priority over shareholders in claims on the company’s assets.