Govt.Treasury bills is a short term promissory notes issued by the Govt.of India at a discount for 14 days,182days and 364 days respectively.It is a money market instrument.
T.Bills are issued at a discount and their yields can be calculated by the following formula:
Y = Yields, F=Face value, P=Issue/Purchase Price AND M=Maturity.
TBs can be purchased by any person,firm,company corporate body and Institutions.This is issued in lots of Rs.25000(14 days),Rs 100000(364days),Rs.100000 and multiples thereof(182days).
All are on the basis of auction.And DFHI is the major auctioning authority.
Investors who wish to purchase these bills on days other than in the fortnightly auction can do so in the secondary market.If available in its stock, DFHI also sell them at its ruling rate.Due to assured liquidity, investment can easily be converted in to cash.
Income is taxable.You have to know details about the topic before dealing.