Don’t allow taxes to eat out your returns. Instead , invest in
Salient Features
Ø The Income by way of interest on
these Bonds is fully exempted from Income Tax and shall not form part of Total
Income as per provision under section 10 (15) (iv) (h) of I.T. Act, 1961.
Ø Wealth Tax is not levied on
investment in Bond under section 2(ea) of the Wealth -tax Act, 1957
Ø Tax Free bonds are issued by
Government Owned Undertakings and carry high credit rating
Ø Bonds to be allotted on
first-cum-first serve basis up to the issue size of relevant tranches
Ø Bonds are likely to be issued
either in Demat form or physical form at the option of bondholders.
Ø Bonds are listed on the WDN
segment of the BSE and the NSE. and so, they will be traded, and
this will provide liquidity to the instrument in a transparent manner.
Ø No Limit on Investment
Ø IRFC Tax Free Bonds are a
lucrative option for investors in the 30% tax bracket. The return generated by
the bonds are much higher than bank deposit.
No banks are offering
11% interest rate neither for short or for such a long period.
Ø NRI’s can invest in bonds through Repatriable as well as Non -
Repatriable basis.
IRFC – Tax Free Bonds have 10 or 15 Yrs Maturity and offer
an average 8.00 to 8.10 % of interest ( 8.15 to 8.30% of Interest – With Some
Condition ). Pre tax yield on these bonds are close to 11 per cent. The coupon is attractive given the fact that it is tax free returns
and compares favorably than other current avenues, like bank or corporate
deposits.
Analysis & Calculation For IRFC Bonds 2012
( 1 ). What is the
face value of each bond? Minimum Investment Size?
Rs. 1,000/- per Bond. ; Minimum 10 Bonds ; Minimum
Investment Size-Rs.10000( thereafter in multiples of 5 bonds)
( 2 ). Who is NRI ?
A Non-Resident Indian is a citizen of India (
holding a valid passport of Government of India ) temporarily residing in the
country of his / her present residence.
NRI includes Person of Indian Origin ( PIO ).
A PIO is a citizen of any country other thanPakistan or Bangladesh if
:
A PIO is a citizen of any country other than
( a ). He / she at any time held an Indian passport
( b ). He / she or either of his/her parents or any
of his/her grandparents was a citizen of India
( c ). The person is a spouse of an Indian citizen or a
person referred in A and B above.
( 3 ). What Type Of
Accounts For NRI – Currently In India
?
( 4 ). If I ’m an
NRI can I invest in these bonds ?
Yes. NRI’s can invest in
bonds through Repatriable as well as
Non - Repatriable basis.
( 1 ). In case of NRIs applying under repatriation basis: If it is received either by inward remittance
of freely convertible foreign exchange through normal banking channels i.e. through rupee
denominated demand drafts/cheque drawn on a bank in India or by transfer of
funds held in the investor’s rupee denominated accounts i.e. Non-resident
External (NRE) account maintained with an RBI authorised dealer or a RBI
authorised bank in India.
( 2 ). In case of NRIs applying under non - repatriation basis - If it is received either by inward
remittance of freely convertible foreign exchange through normal banking
channels i.e. through rupee denominated demand drafts/cheque drawn on a bank in
India or by transfer of funds held in the investor’s rupee denominated accounts
i.e.. Non-resident Ordinary (NRO) account and Non Resident Ordinary (NRO)
maintained with an RBI authorised dealer or a RBI authorised bank in India .
( 5 ). Can person
who has foreign citizenship and having PIO card apply in IRFC Issue?
Yes , Submit self attested copy of PIO Card along with
application
( 6 ). Can a NRI apply
for bonds in Physical mode?
Yes. NRI can apply for physical mode.
( 7 ). There is a
separate form for NRI?
There is no separate form for NRIs, the form for residents
and NRIs are same.
( 8 ). Documents
required along with NRI application in case of Demat mode?
( I ). Application
form in original
( II ). Cheque
from respective bank account – NRE / NRO
( III ). Self attested copy of PIO card ( If client is a
PIO ) Or Notarized copy of POA if application under POA.
( IV ). Pan Card
Copy of POA self certified.
( 9 ). Documents required incase NRI applying in
Physical mode?
Application in Original ( Please complete the Application
Form in all respects, by providing all the information including PAN and
demographic details )
Cheque from respective NRE / NRO saving as applicable.
Self-attested copy of the Income Tax Pan card
self attested copy of PIO card ( if client is a PIO )
Self-attested copy of the proof of residence.
Self-attested copy of a cancelled cheque leaf
Self attested bank statement ( if the given chq does not
display the client Name and account status-NRE/NRO)
Notarized copy of POA if applicable.
Copy Of Power Of Attorney ( Self Certified )
Important note: Applications by NRI in physical form shall
be submitted only at the Collection Centres located at Mumbai, Delhi ,
Ahemdabad, Hyderabad , Chennai, Bangalore ,
Chandigarh and Kochi .
( 10 ). Can one
apply in joint names?
Yes,
Applications may be made in single or joint names (not
exceeding three). In the case of joint Applications, all refunds/ interests/
redemption amounts will be made out in favour of the first Applicant. All
communications will be addressed to the first named Applicant whose name
appears in the Application Form at the address mentioned therein.
Names in the Application Form should be identical to those
appearing in the account details in the Depositories. In case of joint holders,
the names should necessarily be in the same sequence as they appear in the
account details in the Depositories.
( 11 ). Can NRI
apply by doing the direct transfer of funds to escrow account?
No, not allowed
NOTE:
Only cheque from respective NRE / NRO account maintained
with an RBI authorised dealer or a RBI authorized bank in India will be acceptable. Demand
draft along with banker certification is acceptable
( 12 ). Can cheque
be signed by a person holding POA?
Cheque may be signed by the POA holder as long as the
applicant`s bank clears the Cheque
Documentary requirement in case of application made under
power of attorney Notarized copy of POA must be attached with the original
application and cheque.
( 13 ). Who will get
the interest in case of joint application?
In case of joint application, interest will be accounted
to the first holder only, and will be credited to the bank account which is
linked to demat account.
( 14 ). Is there TDS
on the interest on allotment of bonds?
There will be no deduction of tax at source from the
interest on allotment of bonds
( 15 ). Are these
bonds listed any where?
Yes. The Bonds will be listed on NSE and BSE
( 16 ). Will the
scanned copy of form be acceptable?
No.Scanned copy of form will not be acceptable.
( 17 ). Does this
bond carry buyback options?
No. Neither “Put Option” shall be available to the Bondholder(s),
nor would “Call option” be available to the Company to redeem the Bonds prior
to maturity.
Tomorrow I am going to post Some Calculation Sheets here..
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Tomorrow I am going to post Some Calculation Sheets here..
Till next time , Money Happy Returns.
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I have found here much useful information for myself. Many thanks to the editors for the info.
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