Bonds
 
The salient features of the Bond

The Bonds may be held by –
  •  An individual, not being a Non-Resident Indian (NRI)

    •  In his or her individual capacity, or

    •  In an individual capacity on joint basis, or

    •  In an individual capacity on anyone or survivor basis, or

    •  On behalf of a minor as father/mother/legal guardian


  •  Hindu Undivided Family.


  •  Few Points
    •  '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 purpose  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.

Tax Treatment

(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.

Minimum Amount The Bonds will be issued for a minimum amount of Rs. 1000/- & there is no maximum limit for investment.
 
Nomination
A sole holder or a sole surviving holder of a Bond, being an individual, may nominate, one or more persons who shall be entitled to the Bond and the payment thereon in the event of his/her death.
 
Transferability
The Bond in the form of Bond Ledger Account shall not be transferable.
 
Interest Payment
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. Interest on cumulative bonds will be compounded with half-yearly rests and will be payable on maturity along with the principal. The maturity value of the Bonds shall be Rs.1601/- (being principal and interest) for every Rs.1,000/- Interest will be paid from date of issue 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.

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.
 
Repayment
(i) 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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