Its a permanent redirection and it is helpful in passing the rank from new URL to old URL.

A 301 redirect is a permanent redirect which passes between 90-99% of link juice (ranking power) to the redirected page. 301 refers to the HTTP status code for this type of redirect. In most instances, the 301 redirect is the best method for implementing redirects on a website.

301 redirection is use to minimize the canonical tag