How can a customer apply for RBI – Floating Rate Savings Bond, 2020 (Taxable)?

Via Kotak Net Banking: Log in to Net Banking > Investments tab > RBI bonds Visit the branch: By cash (up to Rs. 20,000), cheque or demand draft

How are the bonds issued?

RBI – Floating Rate Savings Bond, 2020 (Taxable) are issued in electronic form and is credited to the investor’s Bond Ledger Account (BLA) on the date of receipt of funds. A Certificate of Holding is issued to the customer as a proof of subscription. Online mode [Through Netbanking] - Login to netbanking > Investments > RBI bonds Offline mode [ Through Branch ]

What is the issue price?

RBI – Floating Rate Savings Bond, 2020 (Taxable) is issued at par or 100%, i.e. the bond amount will be exactly the amount paid. The bonds are issued at a minimum of Rs.1,000 and multiples thereof.

What is the maturity period?

RBI – Floating Rate Savings Bond, 2020 (Taxable) shall be repayable on the expiration of 7 years from the issue date. Interest will not be paid after the maturity of the same.

Whether interest is Taxable?

Interest on the RBI – Floating Rate Savings Bond, 2020 (Taxable) will be taxable under the Income Tax Act, 1961, as applicable according to the relevant tax status of the holders.

Disclaimer and Important Note

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As per the Income Tax Department Circular, the deadline for linking PAN and Aadhaar ended on 30^th June, 2023.

The circular further says that with effect from 1^st July, 2023, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows:

(i) No refund shall be made against such PANs;

(ii) Interest shall not be payable on such refund for the period during which PAN remains inoperative; and

(iii) TDS and TCS shall be deducted /collected at higher rate, as provided in the Act.

You may note that the PAN can be made operative again in 30 days, upon intimation of Aadhaar to the prescribed authority after payment of fee of Rs.1,000. Those persons who have been exempted from PAN-Aadhaar linking will not be liable to the consequences mentioned above. This category includes those residing in specified States, a non-resident as per the Act, an individual who is not a citizen of India or individuals of the age of eighty years or more at any time during the previous year.

Exception:

Pursuant to RBI communication, We will accept the applications from investors having in-operative PAN, towards FRSB, 2020[T] subscriptions, post July 01, 2023. However, the investors having inoperative PAN would face consequences as mentioned above.

We request the customers to update their PAN-AADHAAR immediately.

RBI - Floating Rate Savings Bond, 2020 (T)

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Frequently Asked Questions

How can a customer apply for RBI – Floating Rate Savings Bond, 2020 (Taxable)?

How are the bonds issued?

What is the issue price?

What is the maturity period?

Whether interest is Taxable?