IRFC Tax free bonds for 2012-2013 – Best investment options?
Indian Railway finance corporation Ltd, a Govt of India enterprise is proposing to issue tax free bonds which are in the nature of secured, redeemable, non convertible bonds for the year 2012-2013. The proposed issue is for Rs 1,000 Crores with an option to retain oversubscription up to Rs 8,886.40 Crores.
Indian Railway Finance Corporation Ltd , a Govt. of India enterprise is a dedicated financing arm of Ministry of Railways. Its sole objective is to raise money from market and finance Indian Railways.
Feature of IRFC tax free bonds issue
- Date of open: 21-Jan-2013
- Date of closure: 29-Jan-2013
- Face value : Rs 1,000 per bond
- Min subscription: 5 bonds i.e. Rs 5,000 and multiples of 1 bond thereon
- There are 2 series of tax free bonds. Series-1 for 10 years; Series-2 for 15 years
- Interest rates are as follows:
Tenure Interest-Individuals Interest for Banks/HNI’s
10 years 7.68 7.18
15 years 7.84 7.34
- Crisil, ICRA and CARE have rated this issue as AAA which states as high safety regarding timely serving of the financial obligations.
- No TDS would be deducted on the interest which is paid annually
- You can purchase them in Demat form or physical form
- It would be listed in NSE as well as BSE
- In case these bonds are changing hands, there would be deduction of interest rate of 50 basis points.
- In 2012 end, there was HUDCO tax free bonds issue and IIFCL tax free bonds issue. Comparing to HUDCO tax free bonds, the interest rates are less in IRFC Tax free bonds.
- Barring the less interest rate compared to HUDCO, investment in IRFC tax free bonds would be a best investment option for a tax payer who is in the highest tax bracket, as it would be free fixed income for long term.
- Under the economy where interest rates are falling, investing in such tax free bonds provide good fixed income over long term for every investor.
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