Chidambaram credits Congress for taxable bonds' launch

New Delhi : Former Union Finance Minister P. Chidambaram on Friday expressed happiness over the issuance of the Government of India savings (taxable) bond and hailed the Congress party for "forcing the government" to take this major decision.

Taking to his Twitter handle, Chidambaram said that the move will bring a huge relief to the middle class, senior citizens and retirees.

"We can be legitimately proud that our protests forced the government to issue GoI taxable bonds once again. Huge relief for middle class, senior citizens and retirees (sic)", he tweeted.

On Thursday, the Center announced to launch 7.75 percent savings bonds to enable resident citizens and Hindu Undivided Families (HUF) to invest in a taxable bond, without any monetary ceiling.

Commencing from January 10, 2018, these bonds are open to investment by individuals, including joint holdings and HUFs.

However, NRIs are not eligible for making investments in these bonds.

The bonds will be issued at par, i.e. at Rs. 100.

They will be issued for a minimum amount of Rs. 1,000 (face value) and in multiples thereof.

Accordingly, the issue price will be Rs. 1,000 for every Rs 1,000 (nominal).

The Ministry of Finance also specified that the bonds will be issued in a demat form (bond ledger account) only.

Further, the savings bonds will have a maturity of seven years and carry an interest at 7.75 percent per annum, which will be payable half-yearly.

Therefore, the cumulative value of Rs 1,000 at the end of seven years will be Rs 1,703.