RBI Bonds
Government of India has announced to launch of 8% Savings (Taxable) Bonds, 2003 commencing from 21st April 2003 to enable resident citizens/charitable institutions/universities to invest in a taxable bond, without any monetary ceiling.
The main features of the Bonds are:
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Who can invest :
The Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families/charitable institutions/universities. NRIs are not eligible for making investments in these Bonds.
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Subscription :
Applications for the Bonds in the form of Bond Ledger Account will be received in the designated branches of agency banks and SHCIL in all numbering about 1600.
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Issue Price :
The Bonds will be issued at par i.e. at Rs.100.00 per cent.
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 in demat form (Bond Ledger Account) only.
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Period :
The Bonds will be on tap till further notice and issued in cumulative and non-cumulative forms.
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Limit of investment :
There will be no maximum limit for investment in the Bonds.
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Tax treatment :
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 exempt from Wealth-tax under the Wealth- tax Act, 1957.
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Maturity and rate of interest :
The Bonds will have a maturity of 6 years carrying interest at 8% per annum payable half-yearly. The cumulative value of Rs.1000 at the end of six years will be Rs.1601/-.
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Transferability :
The Bonds are not transferable.
The Bonds are not tradeable in the Secondary market and are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.
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Nomination :
A sole holder or a sole surviving holder of a Bond, being an individual, can make a nomination