Tax deducted at source (TDS): Tax will be deducted at source when the interest is paid on the non-cumulative bonds. And for cumulative bonds, tax on the interest portion of the maturity value will be deducted at source when the maturity proceeds are paid to the investor. Redemption and early exit of GOI Bonds
Although the bonds have a tenure of seven years, they can be redeemed before maturity based on the age of the investor at the time of exiting.
According to the finance ministry, for those in the age bracket of 60 to 70 years, the lock-in period is six years from the date of issue. For those between 70 years and 80 years, it is five years. And for anyone above 80 years, it is four years.
Once an investor, depending on the age, becomes eligible for early surrender of the bonds, a premature exit can be made only at half yearly intervals, i.e., on August 1 and February 1 every year.
The early exit, however, comes at a cost. On the date of premature encashment, 50 percent of the interest due and payable for the last six months of the holding period will be recovered in case of premature withdrawals, both for cumulative and non-cumulative bonds.
Other features
You can nominate more than one person. However, no nomination can be made in respect to bonds issued in the name of a minor. Also, you cannot take loans against the deposit made in the bonds. And the bonds held to the credit of an investor's Bonds Ledger is not transferable.
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