Taxable Bonds
The salient features of the Bond are
as follows:
Eligibility for Investment
The Bonds may be held by -
(i) an individual, not being a
Non-Resident Indian (NRI)
(a) in his or her individual
capacity, or
(b) in an individual capacity on
joint basis, or
(c) in an individual capacity on
anyone or survivor basis, or
(d) on behalf of a minor as
father/mother/legal guardian
(ii) a Hindu Undivided Family.
(iii) (a)'Charitable Institution' to
mean a Company registered under Section 25 of the Indian Companies Act
1956 or
(b) an institution which has
obtained a Certificate of Registration as a charitable institution in
accordance with a law in force; or
(c) any institution which has
obtained a certificate from Income Tax Authority for the purpose 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.
Limit of Investment
There is no maximum limit for
investment in the Bonds.
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.
Issue Price
(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
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.
Date of Issue
(i) The Bonds will be issued with
effect from 21st April 2003. (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.
Form
(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.
Applications
(i) 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. (ii) Applications should be accompanied by the necessary
payment in the form of cash/drafts/cheques as indicated in paragraph 6
above. (iii) 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.
Receiving Offices
Applications for the Bonds in the
form of Bond Ledger Account will be received at: (a) Authorized
Branches of State Bank of India, Associate Banks, Nationalized Banks,
four private sector banks and SHCIL as specified in the Annex 3. (b)
Any other bank or branches of the banks and SHCIL as may be specified
by the Reserve Bank of India in this regard from time to time.
Nomination
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.
Transferability
The Bond in the form of Bond Ledger
Account shall not be transferable.
Interest
(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.