The government has given the public another six months to either cash or convert their prize bonds of Rs40,000 denomination.
In June 2019, the government discontinued the Rs40,000 standard prize bond on the grounds that it is one of the favourite tools for tax evaders to launder their dirty money. Usually, these bonds are traded multiple times (it changes too many hands) before they are cashed.
Since the bonds are not registered in the bearer’s name, it is difficult to trace them. By discontinuing the Rs40,000 (standard) prize bonds, the government tightened the noose around tax evaders.
The first deadline to either cash or convert these prize bonds was March 31, but the Finance Division extended it till June 30. Now, the government has extended the deadline for the second time till December 31.
The Rs40,000 prize bond is the most expensive of the eight denominations the government offers — Rs100 being the cheapest. If you currently have this particular bond, you have six months to avail one of the three choices.
You can cash it anytime, convert it into either a Special Savings Certificate or Defence Savings Certificate or your third option is to convert it into a Premium Prize Bond of Rs40,000 denomination.