Investment option: Investing in this place will be better than FD, you will get tax exemption along with returns..
The last date for filing an income tax return (ITR) for the financial year 2023-24 (assessment year 2024-25) is 31st July. If you have not filed an ITR or have not invested according to your income and tax liability, then make these preparations before 31st July. If you want to adopt the traditional way to invest, then you can invest money in fixed deposits (FD) of banks or corporates.
If you want a higher return on your investment, then bonds can also be a better option. According to tax and investment experts, bonds can prove to be a better investment option than FD in many cases. Banks (latest bank news) are giving about 7 percent interest to ordinary citizens on FD. You can get up to a 9 percent return on bonds. Both these investment instruments also have a lock-in period, while income from bond yield is also exempted from income tax.
Benefits of investing in bonds...
High returns: Due to high returns, investors consider investing in bonds better than FDs. There is no risk in FDs. It gives fixed interest. If you want to take a little risk, then corporate bonds can be a better option in terms of higher returns.
Tax benefits: Bonds are better investment instruments than bank fixed deposits in terms of tax liability. Many bonds like municipal give tax-free interest income.
Liquidity: Bonds (Bond vs FD) provide better liquidity than FDs. FDs have a lock-in period and a penalty has to be paid on withdrawal before maturity. Bonds are considered a secondary market and you can exit from it whenever you want.
Interest up to 7.40% on FD
Bank Interest Rate (%)
Bank of Baroda 7.10
Indian Bank 7.05
PNB 7.05
SBI 6.50
Union Bank 6.35
Axis Bank 6.00
DCB Bank 7.25
Federal Bank 6.00
HDFC Bank 6.00
Karur Vysya Bank 7.40
You can also earn a good profit by selling bonds.
Both bonds and FDs are better means of investment. However, bonds give higher returns than FDs. In terms of tax liability, neither any tax is levied on the income from bonds nor TDS is deducted. According to Section 1961 of the Income Tax Act, income from FD is considered as income from other sources and is taxed accordingly. Investors can also earn profit by selling bonds. This facility is not available in FD.
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