Budget 2018: No TDS on interest up to Rs 10,000 on GOI savings bonds

Budget 2018 has proposed that no tax will be deducted at source from the interest earned on the newly launched 7.75 percent GOI Savings (Taxable) Bonds, if the interest amount is less than or equal to Rs 10,000 during a financial year. If passed, this amendment will take effect from April 1, 2018.

This is good news for those looking to invest in these fixed income instruments. These bonds were introduced in January in lieu of the 8 per cent Savings (Taxable) Bonds, 2003.

Here are the important features of the 7.75 per cent GOI Savings (Taxable) Bonds:


1.Resident Individuals, either singly or jointly, Hindu Undivided Families, on behalf of minor can invest in this scheme.

2.Non-resident Indians cannot invest in the scheme.

3.The bonds have a lock-in of seven years

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4.There is no maximum limit on the investment amounts.

5.These bonds cannot be traded in the secondary markets.

6.Interest is paid on these bonds either on cumulative or non-cumulative basis.

7.The bonds are mandatorily issued in demat form and credited to the Bond Ledger Account (BLA) of the investor and a Certificate of Holding is given to the investor as proof of investment.

8.Interest earned on these bonds is taxable in the hands of the investor.