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Personal Finance Blog India –

REC-Tax Free Bonds March 2012:


// There is an important amendment for REC Tax Free Bonds.As per Gazette Notification issued by the Ministry of ¬†Finance,”Any individual investing upto Rs 5 lakh in REC Tax Free Bonds will be treated as retail investor and investing more than 5 lakh will be treated as HNI”

(It was earlier declared as 1 lakh)

Rural Electrification Corporation (REC),Govt of India undertaking Navratna company has come up with a issue of secured,tax free bonds of size 1500 crore with option to retain oversubscription of upto 3000 crore.Interest received from these bonds will be tax free u/s 10 (15) (iv) (h) of I.T Act 1961 and it will not be a part of the income of the investor.

Issue Details:

  • Issue Open Date: 06th March 2012.
  • Issue Close Date:12th March 2012.

Other Details:

Options Series-1 Series-2
Tenure 10 Yrs 15 Yrs
Interest Payment Annual Annual
Face value Rs/Bond 1000 1000
Min Application 5000 [5 Bonds] 5000[5 Bonds]
Put/Call Option None None
Interest rate for Cateogary I and II [% p.a.] 7.93% 8.12%
Interest rate for cateogary III 8.13 8.32

 Cateogaries:

Cateogary I Cateogary II Cateogary III
QIB & Corporate Individuals / HUFs applying for more than 1 lakhs Individuals/HUFs applying for less than Rs 1 lakh
Upto 50% of overall issue size Upto 25% of overall issue size Upto 25% of overall issue size

Allotment on first come first served basis.

 Other Highlights:

  • Credit ratings: “AAA” from ICRA,CRISIL,CARE.
  • Bonds will be issued in demat mode only.
  • Interest on the refund money will be at rate of 5% p.a.
  • Important thing is that this is NOT 80-ccf issue and no tax benefit will available on principal invested in this issue.

 


Category: Fixed Income

Tagged: ,

2 Responses

  1. ujjwal says:

    Sir,
    I need information on tax free bonds in Fy 2012-2013

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