The Finance Ministry has notified a new 7.75 per cent savings bond scheme for retail investors. “The Government of India has announced the launch of 7.75 per cent Savings (Taxable) Bonds, 2018, commencing from January 10, 2018, to enable resident citizens and Hindu Undivided Family (HUF) to invest in a taxable bond, without any monetary ceiling,” said the Finance Ministry.

The new scheme, which was notified on January 3, would replace the earlier scheme of 8 per cent taxable bonds that was launched in 2003. “This sequenced notification and gap of a week was necessary to avoid overlap in cheque realisations,” said Economic Affairs Secretary Subhash Chandra Garg in a tweet.

The interest will be payable half-yearly and the cumulative value of ₹ 1,000 at the end of seven years will be ₹1,703, it said. While the interest on the bonds will attract income tax, it will be exempt from wealth tax.