Fixed Income

Corporate FDs / NCDs / Cap gain bonds / GoI Bonds

Company Fixed Deposits

  • Company Fixed Deposit (corporate FD) is a term deposit which is held over fixed period at fixed rates of interest.
  • Company Fixed Deposits are offered by Financial and Non-Banking financial companies (NBFCs).
  • The maturities of various company fixed deposits can range from a few months to a few years.
  • You can choose from multiple company fixed deposits options varying in tenures, interest rates and institutions to suit your investment needs.
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Higher Returns

Enjoy greater payoffs from Corporate FDs as compared to Bank FDs

Flexibility

Choose Corporate FDs as per your preference from a variety of tenures such as monthly, quarterly, half-yearly or yearly.

Liquidity

Enjoy better liquidity with Corporate FDs with a lower lock-in period than Bank FDs.

Lower risk

Avail the benefit of reduced risks with Corporate FDs which are backed up reputed rating agencies.

Non Convertible Debentures (NCDs)

Non convertible Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor. Debentures are of two types, namely convertible debentures and non-convertible debentures (NCD).Non-convertible debentures (NCD) are those which cannot be converted into shares or equities. NCD interest rates depend on the company issuing the NCD.

Easily Tradable

NCD investment are listed on the open stock markets and exchanges.

Direct Bank Credit

Interest on NCD investment is paid by a direct bank credit.

Digitalised

Issuance and Trading of NCD investment is in the demat form only.

Lower risk

Only companies with a good credit rating can issued secured NCDs.

Better Returns

Secured NCDs provide a higher NCD interest rate to their investors.

Good Liquidity

Sell NCD investments on stock exchanges or exercise the Put/Call option.

No Upfront Tax

No tax is deducted at sources as per the provisions of Sec 193 of the IT Act.

Diversification

NCD investments add diversification to your portfolio with income security.

Capital gain tax exemption bonds (U/S 54EC)

  • 54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax.
  • 54EC bonds are specifically meant for investors earning long-term capital gains and would like tax exemption on these gains. Tax deduction is available under section 54EC of the Income Tax Act.
  • The maximum limit for investing in 54EC bonds is Rs. 50,00,000.
  • 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.

As per provisions of Income Tax Act, 1961, any long term capital gains arising from transfer of any capital asset would be exempt from tax under section 54EC of the Act if:

  • The entire capital gain realized is invested within 6 months of the date of transfer in eligible bond.
  • Such investment is held for 3 years
    • To avail of capital gain exemption, the bonds so acquired cannot be transferred or converted into money or any loan or advance can be taken on security of such bond within 3 years from date of acquisition else, the benefit would be withdrawn
    • If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax

Save Tax

Long-term capital gains from investment in 54EC bonds or sale of 54EC bonds can be reinvested in order to save tax.

Security

54EC bonds are backed by the government, hence the risk factor associated with buying 54EC bonds is mitigated.

Earn & Save

Investing in 54EC bonds allows you to save tax while earning interest income from the 54EC bonds.

Government of India (GOI) 7.75% Savings (Taxable) Bonds

  • Effective from 10th January'2018, the Government of India replaced 8% Government of India Savings (taxable) bonds, with new 7.75% bonds.
  • It is the safest investment any investor can look for since they are issued by the Government of India
  • Lock-in Period – 7 years
  • Rate of interest – 7.75%
  • Interest on the Bond will be taxable under Income-Tax Act, 1961. Tax will be deducted at source (TDS) while interest is paid.