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,
(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;
(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.
There is no maximum limit for investment in the Bonds.
(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.
(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 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.
(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.
(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
(v) The Certificate of Holding in respect of cash applications
may be issued on the same day as per the extant instructions.
(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
(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
Applications for the Bonds in the form of Bond Ledger Account
will be received at:
(a) Authorised Branches of State Bank of India, Associate
Banks, Nationalised 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.
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
The Bond in the form of Bond Ledger Account shall not be transferable.
(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 Bonds shall not be tradeable in the secondary market and
shall not be eligible as collateral for loans from banks,
financial Institutions and Non Banking Financial Companies,
(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.