NSC and G-sec related

General
1

Hi, is it possible to open a NSC account online ? From banks like SBI, HDFC, Axis? or by any other means in which I don’t have to go to a post office?
NSC and PPF account have fixed interest rates like FD or they keep changing quarterly/half-yearly/yearly? If i’ve an active account, my interest will also keep changing depending on the interest government keep setting?

I just started looking at G-sec for investment and found that there are a lot of ongoing bonds which are listed on Kite but none of them have any liquidity. How am I supposed to buy a bond then?
Even if I’m able to get 1 how can I sell it before its maturity when there’s no liquidity?

Also I checked the current bonds and t-bills listed on coin, if I apply for them, is it guaranteed that i’ll be allocated the amount I bought?
Moreover, T-bills were showing only 3.4% something yield, why would anyone invest in this with such a bad interest rate?

Please be detailed im new to all this!

@Quicko @TeamQuicko

2

Any help? @TeamQuicko

3

@Kaushal_Soni @Divya_Singhvi @Laxmi_Navlani @AkashJhaveri @Sakshi_Shah1 can you?

1 Like
4

Still waiting for any answer!

5

Hey @FalconZex
NSC Account cannot be opened online. The NSC application form (available online) should be filled and submitted along with documents to the bank or post office.
The NSC Interest is fixed and not subject to market fluctuations. The government can revise the interest rate every 6 months. The PPF Interest is fixed by the Finance Ministry every year. Thus, in your active account, the Interest would be calculated as per the rate determined by the government for the applicable period.

The buy or sell transaction of a bond on Kite would depend upon the liquidity. You can buy the bond only if there are sellers available in the market and vice-versa. You can read more about it here - How do I buy NCDs/Bonds/Tax free bonds on Kite? You can also reach out to Team Zerodha for further help related to trading in bonds or any other security.

T-bills are short-term in nature with a maturity of less than 1 year. It is a safe investment & is issued at a discounted price making it an attractive investment option. You can read more about it here - Government Securities – Varsity by Zerodha

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6

I have invested in GSecs through RBI Retail Direct Primary market.

Let’s say if I get a bond at discounted price of Rs.98. Do I need to pay capital gain on maturity.
Also , If I purchase same bond from secondary market and hold till maturity. Am I required to pay capital gain tax?

Note: I am not selling , but purchasing from primary or secondary market at discounted price.

#AskMeAnything

7

Hi @Khyati_Gupta

If you get a bond at a discounted price of Rs.98, the capital gain will be the difference between redemption value & discounted price.

Even if you have purchased a bond from the secondary market, the difference between the purchase price and the sale value will be the capital gain.

8

Hi @Shrutika_Shah , My query is if I do not sell the bond but hold till maturity(I get Rs 100 as Face value). Will there still be capital gain?

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Please help with the above query. Thanks

#AskMeAnything

10

Hi @Khyati_Gupta

Capital gain is charged on redemption. If it is only held, then only interest received shall be charged to tax under Income from other sources.

11

Thank you @Shrutika_Shah

1 Like