Bonds

A bond is categorized as the most common type of fixed income investments in which, an investor come to an agreement with a company or government in exchange of predetermined interest rate for a specific time period.

Why invest in bonds?

• Steady income
• Diversification
• Potential tax benefit
• Liquidity
• Active Management

8% GOI Savings Bonds (Taxable)

Features: The main features of these bonds are as follows: 

• 8% Savings Bonds (Taxable), 2003
  Maturity Period	6 years
  Rate of Interest	8.0% per annum (Taxable)
  Risk Attached	Low Risk
  Minimum Investment	Rs. 1,000/-
  Maximum Investment	Unlimited in multiples of Rs.1,000/-
  Collateral Facility	Available
  Overall Liquidity	Not tradable
  Date of Issue	Date of realization of the funds

Payment of Interest

• Non-cumulative (half yearly): 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 half yearly for period ending 30th June /31st December on 1st August and 1st February.
• Cumulative Interest at the rate of 8% per annum compounded with half yearly rests and will be paid to the investor on maturity along with principal. (the maturity value of the bonds shall be Rs 1601.00/- for every Rs1000/-) (subject to TDS as applicable).

Tax Concessions

• Interest on the Bond will be taxable under Income-Tax Act,1961
• The bonds will be exempt from Wealth-Tax under the Wealth-Tax Act, 1957

Eligibility

The eligibility criteria to obtains these bonds is as follows:

As an individual

• Who is not a Non-resident Indian
• In his or her individual capacity or
• On joint basis, or
• Anyone or survivor basis, or
• On behalf of a minor as father/mother/legal guardian.

As a Hindu Undivided Family

As an Institution

• Charitable Insititution’ under section 25 of the Indian Companies Act 1956
• Institution obtained Certificate Of Registration as charitable institution
• Any Institution which obtained certificate from Income Tax Authority
• U/S 80G of Income Tax Act ,1961.

“UNIVERSITY” established or incorporated by Central, State or Provincial Act, U/S 3 of University Grants Commission Act, 1956.

Nomination

• This facility will be available for Individual investment for sole holder or surviving holder basis. Nomination can be done in FORM B
• (TB-4)
• This facility will not be available for joint holdings and minor investment