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Salient features of the Bond are as follows:
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Eligibility for Investment |
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The Bonds may be held by -
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an individual, not being a Non-Resident Indian (NRI) |
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in his or her individual capacity, or |
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in an individual capacity on joint basis, or |
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in an individual capacity on anyone or survivor basis, or |
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on behalf of a minor as father/mother/legal guardian |
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a Hindu Undivided Family. |
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'Charitable Institution' to mean a Company registered under Section 25 of the Indian
Companies Act 1956 or |
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an institution which has obtained a Certificate of Registration as a charitable
institution in accordance with a law in force; or |
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c. |
any institution which has obtained a certificate from Income Tax Authority for the
purpose of Section 80G of the Income Tax Act, 1961. |
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"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.
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Limit of Investment
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There is no maximum limit for investment in the Bonds. |
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Tax Treatment
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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. |
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Wealth Tax: The Bonds will be exempt from Wealth-tax under the Wealth- Tax Act,
1957. |
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Issue Price |
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The Bonds will be issued at par i.e. at Rs.100.00 percent. |
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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). |
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Subscription |
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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. |
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Date of Issue
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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 realization of draft/cheque. |
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Form
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The Bonds will be issued and held at the credit of the holder in an account called
Bond Ledger Account (BLA). |
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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.
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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 authorized by Reserve Bank of India in
terms of paragraph 10 below. |
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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. |
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The Certificate of Holding in respect of cash applications may be issued on the
same day as per the extant instructions. |
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Applications |
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Applications for the Bonds may be made in Form ‘A’ (Annex 2) or in any
other form as near as thereto stating clearly the amount and the full name and address
of the applicant. |
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Applications should be accompanied by the necessary payment in the form of cash/drafts/cheques
as indicated in paragraph 6 above. |
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Applicants who have obtained exemption from tax under the relevant provisions of
the Income Tax Act, 1961, shall make a declaration to that effect in the application
(in Form 'A') and submit a true copy of the certificate obtained from Income-Tax
Authorities. |
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Nomination |
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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. |
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Transferability |
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The Bond in the form of Bond Ledger Account shall not be transferable. |
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Interest
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The bond will be issued in cumulative and non-cumulative form, at the option of
the investor. |
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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 up to 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.
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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.
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Advances/Tradability against Bonds
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The Bonds shall not be tradable in the secondary market and shall not be eligible
as collateral for loans from banks, financial Institutions and Non Banking Financial
Companies, (NBFC) etc. |
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Repayment
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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.
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