Bonds

Bonds may be held by: An individual, NRI, HUF, Charitable institution or University.

There is no maximum limit for investment. Bonds are issued at a minimum amount of Rs. 1000/- (face value) and in multiples thereof.

Interest on bonds will be taxable under IT Act, 1961. The bonds will be exempt from wealth tax under the Wealth Tax Act, 1957.

Subscription to the Bonds is in the form of Cash/Drafts/Cheques.

Bonds will be issued only in the form of Bonds Ledger Account and may be held at the credit of the holder in an account called Bonds Ledger Account (BLA).

Applications for the Bonds in the form of Bonds Ledger Account will be received at :

1) Any number of Branches of State Bank of India, Associate Banks, Nationalised Banks, four private sector banks and SCHIL as specified in the TB 3.

2) Any other bank or number of branches of the banks and SCHIL where the applications will be received as specified by the Reserve Bank of India in this behalf from time to time.

No nomination shall be made in respect of the Bonds issued in the name of a minor.

1) Every nomination and every cancellation or variation shall be registered at the Receiving Office where the Bonds is issued and shall be effective from the date of such registration.

2) If the nominee is a minor, the holder of a Bonds may appoint any person to receive the Bonds/amount due in the event of his death during the minority of the nominee.

The Bonds in the form of Bonds Ledger Account shall not be transferable.

The Bonds 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 or interest on cumulative Bonds will be compounded with half-yearly rests and will be payable on maturity alongwith the principal, as the subscriber may choose.

Tax will be deducted at source while making payment of interest on the non-cumulative bonds from time to time and credited to Government Account. Tax on the interest portion of the maturity value will be deducted at source at the time of payment of the maturity proceeds on the cumulative Bonds and credited to Government Account.

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 Company (NBFC) etc.

The Bonds shall be repayable on the expiration of 6(six) years from the date of issue.

Brokerage at the rate of Re1.00 (Rupee one only) per Rs.100 will be paid to the brokers including PPF and UTI agents registered with the Receiving Office and also to authorized banks on the applications tendered by them on behalf of their clients and bearing their stamp.