BONDS
6.5 Savings Bonds, 2003 (Tax Free)
Eligibility Of Investment
The bonds may be held by:-
- (I) An individual, not being a Non-Resident India
- In his or her individual capacity or
- In individual capacity on joint basis, or
- In individual capacity on anyone or survivor basis or
- On behalf of a minor as father/mother/legal guardian
- (II) A Hindu Undivided family
There will be no maximum limit of investment in the bonds
The interest on the bonds will be exempt from income-tax under the Income Tax Act, 1961. The bonds will be exempt from Wealth-tax under the Wealth Tax Act 1957.
a) The bonds will be issued at par.
b) The bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiplies thereof.
Accordingly, the issue price will be Rs. 1000/- for every 1,000/- (Nominal)
Half yearly options: Interest will be paid on 1st January / 1st July.
On Maturity: Compounded with half yearly rates and will be payable on maturity along with principal
maturity value will be Rs 1,376.90 (being principal and interest) for every Rs 1,000/- invested.
Subscription to the bonds will be in the form of Cash/Drafts/ Cheques.
The bonds in the form of Bond Ledger Account and Stock Certificate shall not be transferable except by way of gift to a relative defined in the section of the Indian Companies Act, 1956, by execution of appropriate Transfer Form as given in Annexure 6A and 6B (as may be applicable) and an execution of an affidavit by the holder.
The Bonds shall not be tradable in the secondary market shall not be eligible as collateral for loans from banks, financial institutions and Non-Banking Financial Company (NBFC) etc.
The Bonds shall be repayable on the expiration of 5 (five years) from the date of issue. No interest would accrue after the maturity of the bond.
After minimum lock in period of 3 years from the date of issue, an investor can surrender the Bonds at any time after the 6th half year but redemption payment will be made on the following interest payment due date (as indicated below). Thus the effective date of premature encashment will be 1st July and 1st January every year. However 50% of the interest due and payable for the last six months of the holding period will be recovered in such cases both in respect of cumulative and Non-cumulative Bonds.
8 % RBI BONDS (Taxable)
Eligibility Of Investment:
The bonds may be held by:-
- (I) an individual, not being a Non-Resident Indian -
- In his or her individual capacity, or
- In individual capacity on joint basis, or
- In individual capacity on anyone or survivor basis or
- On behalf of a minor as father/mother/legal guardian
- (II) A Hindu Undivided Family.
- (III) 'Charitable Institution' to mean a Company registered under Section 25 of the Indian Companies Act 1956 or
- An institution which has obtained a Certificate of Registration as a charitable institution in accordance with a law in force; or
- Any institution which has obtained a certificate from Income Tax Authority for the purposes of Section 80G of the Income Tax Act, 1961.
- (IV)"University" means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a university for the purposes of that Act.
There will be no maximum limit for investment in the Bonds.
(i) Income-tax: Interest on the Bonds will be taxable under the Income-Tax Act, 1961 as applicable
according to the relevant tax status of the bond holder.
(ii) Wealth tax: The Bonds will be exempt from Wealth-tax under the Wealth- tax Act, 1957.
(i)The Bonds will be issued at par i.e. at Rs.100.00 percent.
(ii) The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof.
Accordingly, the issue price will be Rs.1000/- for every Rs.1,000/-(Nominal).
Subscription to the Bonds will be in the form of Cash/Drafts/Cheques. Cheques or drafts should be drawn in favour of the Receiving Office, specified in paragraph 10 below and payable at the place where the applications are tendered.
(i) The Bonds will be issued with effect from 21st April 2003 and will remain on tap till further notice.
(ii) The date of issue of the Bonds in the form of Bond Ledger Account will be the date of receipt of subscription
in cash or the date of realisation of draft/cheque.
(i) The Bonds will be issued and held at the credit of the holder in an account called Bond Ledger Account (BLA).
(ii) New Bond Ledger series with the prefix (TB) are to be opened. All investment in 8% Savings (Taxable) Bonds by
an existing BLA holder will be viewed as a new investment under a new BLA.
(iii) The Bonds in the form of Bond Ledger Account will be issued by and held with designated branches of the
agency banks and SHCIL as authorised by Reserve Bank of India in terms of paragraph 10 below.(iv) The Certificate
of Holding in respect of Bond Ledger Account will be issued in Form TBX or Form TBY as applicable for non-cumulative
and cumulative investments respectively.
(v) The Certificate of Holding in respect of cash applications may be issued on the same day as per the extant instructions.
A sole holder or a sole surviving holder of a Bond, being an individual, may nominate in form B (Annex - 4) or as near thereto as may be, one or more persons who shall be entitled to the Bond and the payment thereon in the event of his/her death
The Bond in the form of Bond Ledger Account shall not be transferable.
(i) The bond will be issued in cumulative and non-cumulative form, at the option of the investor.
(ii) The Bond will bear interest at the rate of 8% per annum. Interest on non-cumulative bonds will be payable at
half-yearly intervals from the date of issue in terms of paragraph 7 above. Interest on cumulative bonds will be
compounded with half-yearly rests and will be payable on maturity along with the principal. In the latter case,
the maturity value of the Bonds shall be Rs.1601/- (being principal and interest) for every Rs.1,000/-(Nominal).
Interest to the holders opting for non-cumulative Bonds will be paid from date of issue in terms of paragraph 7
above upto 31st July/31st January, as the case may be and thereafter at half-yearly for period ending 31st July/
31st January on 1st August and 1st February. Interest on Bond in the form of "Bond Ledger Account" will be paid,
by cheque/warrant or through ECS by credit to bank account of the holder as per the option exercised by the investor/holder.
The Bonds shall not be tradeable in the secondary market and shall not be eligible as collateral for loans from banks, financial Institutions and Non Banking Financial Companies, (NBFC) etc.15. Repayment The Bonds shall be repayable on the expiry of 6 (Six) years from the date of issue. No interest would accrue after the maturity of the Bond.