IFAs can recommend HUDCO and IRFC tax-free bonds to those clients (especially NRIs) who are looking for steady income.
HUDCO and IRFC are tax-free, secured, redeemable, non-convertible bonds in the nature of debentures. These bonds will be open till 6 February and 10 February, respectively.
Bondholders can avail the following tax benefits:
· Interest on these bonds shall be exempt from income tax and shall not be included while computing the total income as per provisions under section 10 (15) (iv) (h) of Income Tax Act, 1961.
· There shall be no deduction of tax at source.
· Wealth tax will not be levied on investment.
Who can apply: Institutions, resident Indian individuals, HUFs and NRIs
Application Size: Minimum of 10 bonds for both bonds and thereafter in multiples of one bond for HUDCO and five bonds for IRFC. 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.) |
HUDCO- 8.1%
IRFC - 8% |
HUDCO- 8.2%
IRFC - 8.1% |
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Interest Payment Date |
HUDCO - Day falling one year from the Deemed Date of Allotment
IRFC - Every year on October 15 |
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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 |
HUDCO - 10 Bonds and in multiples of one Bond thereafter.
IRFC - 10 Bonds and in multiples of five Bonds thereafter. |
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Rating |
HUDCO – “CARE AA+” by CARE and “Fitch AA+ (ind)” by Fitch.
IRFC - “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE & “[ICRA] AAA” by ICRA |
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