Are you in highest tax bracket but dont like paying huge taxes on the interest earned on regular bank FDs?
Are you transitioning between two properties - sold one already but wish to avoid paying Capital Gains Tax until you reinvest in another property?
Fixed Income securities
Fixed Income securities form an important part of any portfolio. They are issued by financial institutions, NBFCs, govt agencies, corporates etc.
Company FDs are mobilized and governed under section 58A of the Companies Act. These deposits are unsecured, hence carry higher interest rate than the prevailing market rate. They are typically of shorter duration (1 to 3 years).
Bonds on the other hand, have much longer maturity, and the market has several varieties – Infrastructure bonds, GoI bonds, Capital Gain Bonds, NCDs/Corporate bonds etc. Tax free bonds are issued by Govt agencies (REC. PFC etc) and dont attract taxes on the interest earned. Capital Gain bonds are particularly helpful for investors, who are in between selling and buying of a property.
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