Taxable 8% Savings Bonds, 2003 are issued by Government of India with effect from 21st April 2003 in terms of their Notification No. F.4(10)-W&M/2003 dated 21st March 2003.

• The bonds are exempt from Wealth-tax
• Interest rate of 8% p.a. Non-cumulative payable half yearly and Cumulative payable on maturity
• Nomination facility is available
• The bonds are issued in an account called Bond Ledger Account (BLA)
• Investment tenure of 6 years
• Low Risk
• No upper limit on investment
• Maturity value shall be Rs.1601/- being the principal and interest for every Rs. 1000/- in the cumulative option
• Transfer of Bond is not permissible
• No tax would be deducted at source from the interest amount

The Bonds may be held by

1. An individual, not being a Non-Resident Indian
   1. in his or her individual capacity
   2. in individual capacity on joint basis
   3. in individual capacity on anyone or survivor basis
   4. on behalf of a minor as father/mother/legal guardian
2. A Hindu Undivided Family (HUF)
3. 'Charitable Institution' to mean a Company registered under Section 25 of the Indian Companies Act 1956
   1. an institution which has obtained a Certificate of Registration as a charitable institution in accordance with a law in force
   2. any institution which has obtained a certificate from Income Tax Authority for the purposes of Section 80G of the Income Tax Act, 1961.
4. "University" means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a university for the purposes of that Act.

There will be no maximum limit for investment in these Bonds.

• Income-tax: Interest on the Bonds is taxable according to the tax status of the bond holder. However, tax would not be deducted at source from the interest payment.
• Wealth tax: The Bonds will be exempt from Wealth-tax

The Bonds will be issued at par i.e. at Rs.100 percent.

A sole holder or a sole surviving holder of a Bond, being an individual, may nominate, one or more persons who shall be entitled to the Bond and the payment thereon in the event of his/her death

The Bond in the form of Bond Ledger Account shall NOT be transferable

• The bond will be issued in cumulative and non-cumulative form, at the option of the investor.
• The Bond will bear interest at the rate of 8% per annum. Interest to the holders opting for non-cumulative Bonds will be paid from date of issue up to 31st July/31st January, as the case may be and thereafter at half-yearly for period ending 31st July/31st January on 1st August and 1st February.

Interest on cumulative bonds will be compounded with half-yearly rests and will be payable on maturity along with the principal. The maturity value of the Bonds shall be Rs.1601/- (being principal and interest) for every Rs.1,000/-(Nominal). Interest on Bond in the form of “Bond Ledger Account” will be paid, by cheque/warrant or through ECS credit to bank account of the holder as per the option exercised by the investor/holder

The Bonds shall NOT be tradable in the secondary market and cannot be offered as collateral for loans from banks, financial Institutions and Non Banking Financial Companies, (NBFC) etc.

• The Bonds shall be repayable on the expiry of 6 (Six) years from the date of issue.
• No interest would accrue after the maturity of the bond.