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Tax Saving Bond

Investors can avail of rebate under Section 88 of the Income Tax Act, 1961 by investing in this Bond.

The proceeds from this Bond shall be deployed towards infrastructure projects in accordance with the Income-tax Rules.

The Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, Government of India has vide its letter F.NO.178/ 57/2000-IT(AI) dated August 17, 2000 declared the Tax Saving Bond as eligible security for the purpose of Section 88 of the Income-tax Act, 1961. The tax rebate under Section 88 can be availed of by NRIs provided NRIs opt not to be assessed under the Special Provision(s) of Chapter XII-A of the Income-tax Act, 1961.

The investors can choose either/both of the following options in respect of Tax Saving Bond:

Option I II
Tax Benefit under Section 88 88
Issue Price (Rs.) 5,000/- 5,000/-
Face Value (Rs.) 5,000/- 7,000/-
Redemption Period 3 years 3 years
4 months<
Interest (%)* (p.a.) 10.50 DDB @
(YTM 10.6%)
Interest Payable Annually DDB @
Minimum Application 1 Bond 1 Bond
Yield to Investor (%)* > #
(Including Tax Benefits)
21.7 19.7


@ Tax Saving Bond-Option II is in the nature of Deep Discount Bond (DDB), hence no periodic interest is payable.

* Subject to TDS as per the then prevailing tax laws.

> It has been assumed that a surcharge of 15% of tax is payable in case of both the options.

# Rounded off to nearest multiple of 0.1

Notes:

(i) Under Section 88, individuals and HUFs would be entitled to claim rebate on investments made up to Rs. 80,000/-.
(ii) Investors applying for Option II would be entitled to benefit under Section 88 in respect of Issue Price only and not on the Face Value of the Bond.

Tax Benefits under Option I (Annual Interest)
— Please refer points 1, 2, 4 & 5 of II A of the Tax Benefits on page 22.
— For NRIs/OCBs, refer points 1 to 7 and 9 of II B of the Tax Benefits.
— For other eligible institutions, refer points 1 and 2 of II C of the Tax Benefits.


Tax Benefits under Option II (in the nature of Deep Discount Bond)
— Please refer points 1 to 5 of II A of the Tax Benefits.
— For NRIs/ OCBs, refer points 1 to 9 of II B of the Tax Benefits.
— For other eligible institutions, refer points 1 and 2 of II C of the Tax Benefits.

Regular Income Bond

This Bond has been designed keeping in view the need for a regular income to meet expenses that are incurred on a regular basis - for example, household expenses. The product also helps provide a source of income to individuals who have either a variable income (Self Employed Professional, etc.) or who are not employed any longer. Depending upon their requirements investors can choose Monthly/ Half-yearly/Annual option for payment of interest.

Face Value : Rs. 5,000/-

Redemption : At Face Value, i.e., Rs. 5,000/-

The investors can choose any/all of the following options in respect of payment of interest.

Option I II III
Minimum Application 3 Bonds 2 Bonds 1 Bond
Redemption Period 5 years >5 years 5 years
Interest*(%) (p.a.) 10.75 11.00 11.40
Interest Payable Monthly Half-yearly Annually
Yield to Investor(%)*# 11.3 11.3 11.4


* Subject to TDS as per the then prevailing tax laws.

# Rounded off to nearest multiple of 0.1

For Tax Benefits :
— Please refer points 1, 2 & 5 of II A of the Tax Benefits on page 22.
— for NRIs/OCBs, refer points 1 to 7 of II B of the Tax Benefits.
— for other eligible institutions, refer points 1 and 2 of II C of the Tax Benefits.

Money Multiplier Bond (in the nature of Deep Discount Bond)

Events such as a child’s wedding, education, purchase of a house, etc.,require a lumpsum at a particular point in time. This product has been designed to meet these and similar such requirements.

Each Money Multiplier Bond in the nature of Deep Discount Bond will have a different Face Value under each Option and will be issued at a discounted price.

The investors can choose any/all of the following options (as per the table below) in respect of the Money Multiplier Bond:

Option I II III IV V
Issue Price (Rs.) 5,000/- 5,000/- 5,000/- 5,000/- 5,000/-
Redemption
Period
3 years
10 months
6 years
5 months
10 years 14 years
8 months
20 years
11 months
Face Value (Rs.) 7,475/- 10,000/- 15,000/- 25,000/- 50,000/-
Minimum Application 1 Bond 1 Bond 1 Bond 1 Bond 1 Bond
Yield to Investor (%)*# 11.1 11.4 11.6 11.6 11.6


* Subject to TDS as per the then prevailing tax laws

# Rounded off to nearest multiple of 0.1

For Tax Benefits :

— Please refer points 1, 2, 3 & 5 of II A of the Tax Benefits on page 22.
— for NRIs/OCBs, refer points 1 to 8 of II B of the Tax Benefits.
— for other eligible institutions, refer points 1 and 2 of II C of the Tax Benefits.