IFAs can recommend “NHAI Tax Free Bonds – Tranche 1” to those clients, especially NRIs, who are looking for extra income.
NHAI Tax Free Bonds – Tranche 1 are tax-free, secured, redeemable, non-convertible bonds in the nature of debentures. These bonds will be open till 11th January 2012.
Bondholders can avail the following tax benefits:
- The income, by way of interest, on these Bonds shall not form part of total income;
- There shall be no deduction of tax at source from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors;
- A listed Bond is treated as a long term capital asset, if the same is held for more than 12 months immediately preceding the date of its transfer; under section 112 of the I.T. Act, capital gains arising on the transfer of listed Bonds shall be taxed @ 10% without indexation;
- Wealth Tax is not levied on investment in Bond.
Who can apply: Institutions, Resident Indian Individuals, HUFs and NRIs
Application Size: Minimum of 50 bonds and in multiples of one bond thereafter. Each bond has a face value of Rs. 1,000 per bond.
Availability: In dematerialized and physical form.
Who can sell the product?
- Registered stock-brokers with any Stock Exchange along with their respective sub-broker;
- Banks and brokers selected by the issuing company.
How can an IFA get registered to sell the product?
An IFA who wishes to sell the product needs to sign the sub-broker agreement with a stock-broker.
Bond Features
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Options for
Subscription |
Series I |
Series II |
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Frequency of Interest Payment |
Annual |
Annual |
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Coupon Rate (% p.a.) |
8.2% |
8.3% |
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Interest Payment Date |
Every year on October 01, and on
respective maturity |
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Tenor |
10 years |
15 years |
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Face Value & Issue Price |
Rs 1,000 per bond |
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Minimum Application |
50 Bonds and in multiples of one Bond
thereafter. |
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Rating |
“CRISIL AAA/Stable” by CRISIL, “CARE
AAA” by CARE and “Fitch AAA(Ind)” by FITCH |
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Applicant Category |
Category 1: Companies/Bodies Corporate/Registered Societies/Public/Private
Charitable/Religious Trust/Partnership Firms in the name of the partner; and
Limited liability partnership |
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Basis of Allotment |
For Category 1
& 2 on First come first serve basis and for Category 3 on propotionate
basis. Applicants belonging to Category 1 will be upto 40% of overall size
while applicants belonging to the Category 2 & 3 will be upto 30% of
overall size each. |
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Nature of the Bond |
Secured |
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Security |
Property situated
at Ahmedabad alongwith, fixed assets of NHAI, being highway project
comprising of all superstructure including highway lightings, road barriers
and dividers, bridges, culverts and all other super structures constructured
on national highways entrusted to NHAI.
The mode of creaton of security shall be by way of mortgage, such
security creation requires prior approval and authorization by the Central
Government as owner of the land. |
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Issuance & Trading |
Bonds will be primarily issued in
dematerialized form and also in physical form. However, trading will be
allowed only in dematerialized mode. |
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Registrars: MCS Limited
Debenture Trustee:
SBICAP Trustee Company Limited
Depositories: NSDL
and CDSL
Listing: Proposed to
be listed on BSE & NSE
Lead Brokers: SBICAP
Securities Limited, AK Stockmart, ICICI Securities, Kotak Securities.
