Fixed income · India · tax reviewed 7 September 2026

Know the return. Know the risk. Know the tax.

Every section is clickable. Learn how the product works, who owes you the money, how liquid it is, what can go wrong and how Indian tax can change the real return.

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Every fixed-income section is clickable

Each guide contains basic information, risk, liquidity, taxation and a simple ₹6L / ₹12L / ₹50L tax illustration.

FDTaxable at slab

Bank Fixed Deposits

Lock money with a bank for a chosen tenure and receive a contracted interest rate.

Return: Fixed / contractedTax: Interest generally taxed at your applicable slab rate.
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CFDTaxable at slab

Corporate Fixed Deposits

A company accepts a fixed-term deposit and promises interest plus repayment at maturity.

Return: Fixed / contractedTax: Interest generally taxed at slab; no DICGC bank-deposit cover.
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NCDIncome + capital-gain rules

Non-Convertible Debentures (NCDs)

Company debt securities with coupon, maturity and credit terms defined in the issue document.

Return: Coupon + market priceTax: Coupon usually at slab; sale gains depend on listing and holding period.
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BONDIncome + capital-gain rules

Corporate Bonds

Tradable debt issued by companies to borrow from investors for a defined maturity.

Return: Coupon + price movementTax: Coupon generally at slab; listed/unlisted capital-gain rules differ.
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G-SecSovereign credit

Government Securities (G-Secs)

Central or State Government debt securities with coupon and maturity, available to retail investors.

Return: Coupon + market priceTax: Coupon taxable at slab; sale can create capital gain/loss.
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T-BillShort-term sovereign

Treasury Bills

91-, 182- and 364-day Government of India zero-coupon securities issued at a discount.

Return: Discount to face valueTax: Economic return is taxable; short-term treatment commonly results in slab-rate tax.
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FRSBTaxable government bond

RBI Floating Rate Savings Bonds

Seven-year, non-tradeable Government of India savings bonds with a coupon reset every six months.

Return: Floating couponTax: Interest is taxable at applicable rates.
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TFBCoupon can be exempt

Tax-Free Bonds

Legacy notified bonds whose qualifying coupon interest is exempt; most retail access is through the secondary market.

Return: Tax-exempt coupon + price movementTax: Qualifying coupon exempt; sale gains are separate and taxable.
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POSTTax varies by scheme

Post Office & Small Savings

Government-backed savings products such as PPF, NSC, SCSS, Time Deposit, MIS, RD and KVP.

Return: Scheme-specificTax: PPF can be exempt; many other schemes have taxable interest.
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Tax works differently for different fixed-income returns

No repeated “one slab chart fits all”. Open any instrument above to see a ₹6 lakh, ₹12 lakh and ₹50 lakh income-person example using that instrument’s own return type.

FY 2026-27 · New regime examples
Taxable interest / coupon

Bank FD, Corporate FD, taxable bond coupons, G-Sec coupons and FRSB interest are generally added to normal taxable income and taxed at applicable slab rates.

Notified tax-free interest

Interest on a qualifying notified tax-free bond is exempt. “Tax-free” normally applies to the coupon, not automatically to a profit when you sell the bond.

Sale / redemption profit

Bonds and securities can create capital gains. Listed-bond LTCG is generally 12.5% without indexation after the current long-term holding period; unlisted bonds/debentures can have special short-term treatment.

Post Office schemes

Tax treatment is mixed. PPF/Sukanya are generally exempt on qualifying interest/maturity, while TD/MIS/SCSS and several other schemes can have taxable interest.

How to read the person examples: “₹6L / ₹12L / ₹50L income” means the person already has that amount of normal taxable income before the fixed-income return shown on that page is added. This directly shows how much the investment can increase the person’s total tax. Exact threshold cases can look unusual because rebate, surcharge, marginal relief and 4% cess interact.

Tax words — in plain English

You should not need tax jargon to understand an investment.

IndexationAn inflation adjustment that increases the tax cost of an asset before calculating capital gain. Under current rules it has been removed for most long-term gains on transfers on/after 23 July 2024; listed bond/debenture LTCG is generally 12.5% without indexation.
TDSTax Deducted at Source. The bank/company may deduct tax before paying you. It is a credit against your final tax — not automatically your final tax liability.
RebateA reduction from calculated income tax. Under the default new regime, a qualifying resident individual can receive up to ₹60,000 rebate when total income does not exceed ₹12 lakh.
Marginal reliefA rule that softens a sudden tax jump just above a threshold, such as the ₹12 lakh rebate boundary or surcharge thresholds.
CessHealth & Education Cess: 4% charged on income tax plus surcharge, if any.
SurchargeAn extra percentage charged on the income-tax amount when total income crosses specified high-income thresholds. In the new regime, the first threshold is above ₹50 lakh.
Quick comparison

Start with the risk you are actually taking

“Fixed income” describes cash-flow structure—not guaranteed safety in every instrument.

Bank FDDeposit contract; DICGC limits matter
Corporate debtIssuer can default; rating is not a guarantee
Government debtSovereign credit, but market price can move
Tax-free bondCoupon may be exempt; price and capital gains still matter
Read the NCD vs FD vs bonds comparison →

Compare return after tax, not only the headline rate.

Underpitch can help you compare tenure, credit quality, liquidity and post-tax yield before you invest.

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