Table of Contents
Treasury Bills are the short-term money market instrument, issued by the central Bank on behalf of the government to curb temporary liquidity shortfalls. Treasury bills also known as T-bills, have a maximum maturity of a 364 days. Hence, they are categorized as money Market instruments. Treasury bills are usually held by financial institutions including banks.
T-bills have a very important role in the financial market beyond investment instruments. Banks give treasury bills to the Reserve Bank of India (RBI) to get money under repo.
At present there are three types of auctioned T-bills, which are:
The tenure of these bills complete on 91 days. These are auctioned on Wednesday, and the payment is made on following Friday.
Talk to our investment specialist
These treasury bills get matured after 182 days, from the day of issue, and the auction is on Wednesday of non-reporting week. Further, these are repaid on following Friday, when the term expires.
The maturity period of these bills is 364 days. The auction is on every Wednesday of reporting week and repaid on the following Friday after the term gets over.
|Monetary Policy Rate||01 Mar 2021||4||4||%, NSA||Daily|
|Money Market Rate||01 Mar 2021||3.35||3.35||%, NSA||Daily|
|stock market index||01 Mar 2021||49,849||-||Index, NSA||Daily|
|Average Long-term Government bond||24 Feb 2021||3.7||3.71||% p.a., NSA||Wednesday Weekly|
|Treasury Bills (over 31 days)||24 Feb 2021||3.48||3.52||% p.a., NSA||Wednesday Weekly|
|Lending Rate||19 Feb 2021||4.25||4.25||%, NSA||Friday Weekly|
The trading hours are from
9 a.m. to 5.00 p.m on working days from Monday to Friday and the contract Size is Rs. 2 lakh.
If there is any appreciation in the bond price, it is considered Capital gains. Long-term capital gains (LTCG) is 10% Flat or 20% with indexation, whereas Short Term Capital Gains (STCG) is as per the applicable slab rate.
When it comes to T-bills, the appreciation is considered as short-term Capital Gain as you buy at a discount and sell it at par. So the Taxes is as per the applicable slab rate.