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Bonds/NCDs >> GOI Taxable Bonds @ 8%

8% GOI Taxable Bonds

Taxable 8% Savings Bonds, 2003 are issued by Government of India with effect from 21st April 2003.

Eligibility for Investments

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 (HUF)
'Charitable Institution' to mean a Company registered under Section 25 of the Indian Companies Act 1956
An institution which has obtained a Certificate of Registration as a charitable institution in accordance with a law in force.
An 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.

Limit of Investment

There will be no maximum limit for investment in these Bonds.

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.

Advances/Tradability against Bonds

The Bonds shall NOT be tradable in the secondary market and cannot be offered as collateral for loans from banks, financial Institutions and Non Banking Financial Companies, (NBFC) etc.

Transferability

The Bond in the form of Bond Ledger Account shall NOT be transferable.

Tax Treatment

Interest income from the Bonds is taxable. TDS is deducted at the time of interest payment as per the prevailing IT Rules.

Interest

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 to the holders opting for non-cumulative Bonds 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.
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/-(Nominal). Interest on Bond in the form of “Bond Ledger Account” will be paid, by cheque / warrant or through ECS credit to bank account of the holder as per the option exercised by the investor/holder.

Repayment

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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