Dilzer Consultants - Investments and Financial Planning

An ISO 9001 (2008) Certified Company

   SEBI REGISTERED INVESTMENT ADVISOR

RBI Bonds

Reserve Bank of India Bonds are bonds issued by the Government of India, as part of its borrowing mechanism from retail investors. 

Being issued from the Government of India, they are Sovereign in nature and the return, although low, is guaranteed by the Government of India.

Tax Treatment

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.

Issue Price

  • The Bonds will be issued at par i.e. at Rs.100.00 
  • 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.

 

  • The Bonds will be issued and held at the credit of the holder in an account called Bond Ledger Account (BLA).
  • 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.
  • 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.
  • 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.
  • The Certificate of Holding in respect of cash applications may be issued on the same day as per the extant instructions.

 

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

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.

For more details contact us