The Telegraph
Since 1st March, 1999
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8% bonds arrive on April 21

Mumbai, April 4: The Reserve Bank of India (RBI) has announced the launch of the 8 per cent Savings Bonds, 2003. To be sold from April 21, the bonds will mature in six years, will be taxable and carry no investment cap.

Individuals (including joint holdings) and Hindu Undivided Families/charitable institutions/universities can invest in them, but non-resident Indians cannot, a circular issued by the RBI said.

Applications to be submitted in the form of Bond Ledger Account can be sent to 1600 centres in designated branches of agency banks and Stock Holding Corp.

The bonds will be issued for a minimum amount of Rs 1,000 (face-value) and in multiples thereof. The issue price will, therefore, be Rs 1,000 for every Rs 1,000 instrument.

The bonds will be on tap (can be purchased any time) till further notice and issued in cumulative and non-cumulative forms. While there will be no maximum limit for investment, interest on the money invested will be taxable under the Income-tax Act, 1961.

However, the capital gain will be exempted from wealth tax under the Wealth Tax Act, 1957. The cumulative value of Rs 1,000 at the end of six years will be Rs 1,601.

Gilt auction

The Reserve Bank will conduct auctions of two Government of India security, including a new 20-year paper, aggregating Rs 9,000 crore on April 8. The auction of a new 20-year stock of a notified amount of Rs 4,000 crore will be conducted through a yield-based auction using multiple price method, the RBI said in a release.

The sale of 7.37 per cent Government of India stock of Rs 5,000 crore maturing in 2014 will be made through a price-based auction using multiple price method.

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