We are dealing with three types of Government Bonds:

RBI Bonds:

Under RBI Bonds two kinds of bonds available.

RBI 6.5% Tax Free Bonds.

RBI 8% savings Taxable bonds.

Infrastructure Bonds u/s 88 of IT act:

These bonds are used for Tax rebate u/s 88. There is provision of 20% or 15% tax rebate depending upon the income category.

The bonds are as below.

1. IDBI Omni Bonds

2. IDBI Flexi Bonds

3. ICICI Bank Ltd. Bond

Capital Gains Tax Savings Bond:

The amount of capital gains made by a tax paying individual or entity(after deducting the purchase/transaction costs and adjusting for indexation)can be invested in notified bonds under section 54 EC. These bonds are called Capital Gains Tax Savings Bond. The minimum holding period is 3 years.

The following are the bonds under this category.

1. NHAI Capital Gains Bonds issued by National Highways Authority of India.

2. NHB Capital Gains Bonds issued by National Housing Bank.

3. REC Capital Gains Bonds issued by Rural Electrification Corporation Of India.

4. SIDBI Capital Gains Bonds issued by Small Industries Industrial Development Bank Of India.