Bonds
 
The Bonds may be held by  
  • An individual, not being a Non-Resident Indian
  • In his or her individual capacity
  • In individual capacity on joint basis
  • In individual capacity on anyone or survivor basis
  • On behalf of a minor as father/mother/legal guardian
  • A Hindu Undivided Family.
  • 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.
  • "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.
     
  • 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.
  • Wealth tax: The Bonds will be exempted from Wealth-tax under the Wealth- tax Act, 1957.
     
  • The Bonds will be issued at par i.e. at Rs.100.00 percent.
  • 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).
     
  • The Bonds will be issued and held at the credit of the holder in an account called Bond Ledger Account (BLA).
  • 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 BLA11.
     
  • 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.
     
  • The bond will be issued in cumulative and non-cumulative form, at the option of the investor.
  • 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 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.
     
  • 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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