Benefits to the Investor:

-The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961.

– There will 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.

– Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957

Key Strengths:

 Assured net interest margin.  Strategically important position in the Indian railway sector  No non-performing assets.  Consistent financial performance  Low financial risk due to government support  Low cost of borrowings  Competent and committed workforce.

Important Information (Instruction)

Please take print of the Application Form on A3 / A4 paper size.
Attach following document along with the application form : –
1] PAN Card Photo Copy attested by you,
2] Address Proof photocopy attested by you.
3] One cancelled cheque/copy of cheque (for ECS)
4] Cheque / DD should be drawn in favour of “IRFC Tax Free Bonds 2013 – Escrow Account – R.”
5] On First come First Serve Basis
6] Keep photocopy of application form for your record.
7] Submit / deposit your IRFC Bond application form in Listed/ Design Bank Branches.
8] To record and track the status/allotment of your application form, send us the soft copy Application Form/ Acknowledgement Slip.
9] The actual bond certificate will be send by post within 8-12 weeks time form date of allotment.
10] Free Home Service is available in Pune Area.(Min Investment Rs. 50,000/-)

Who Can Apply/Invest?

Category I, II, III, IV.
Category IV: The following Investors applying for an amount aggregating to up to and including Rs. 10 lakhs across all Series of Bonds in each Tranche Issue:
- Resident Indian individuals;
- Eligible NRIs on a repatriation or non – repatriation basis;
- Hindu Undivided Families through the Karta; and
–     Eligible QFIs being an individual.

[table “20” not found /]

Taxation

Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, 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 long term capital assets being listed securities are subject to tax at the rate of 20% of capital gains calculated after reducing indexed cost of acquisition or 10% of capital gains without indexation of the cost of acquisition. The capital gains will be computed by deducting expenditure incurred in connection with such transfer and cost of acquisition/indexed cost of acquisition of the bonds from the sale consideration.

However as per third proviso to section 48 of Income tax act, 1961, benefits of indexation of cost of acquisition under second proviso of section 48 of Income tax Act, 1961 is not available in case of bonds and debenture, except capital indexed bonds. Thus, long term capital gain tax can be considered 10% on listed bonds without indexation.

Securities Transaction Tax (“STT”) is a tax being levied on all transactions in specified securities done on the stock exchanges at rates prescribed by the Central Government from time to time. STT is not applicable on transactions in the Bonds.

In case of an individual or HUF, being a resident, where the total income as reduced by the long term capital gains is below the maximum amount not chargeable to tax i.e. Rs. 2,00,000 in case of all individuals, Rs. 250,000 in case of resident senior citizens and Rs. 500,000 in case of resident super senior citizens, the long term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of ten per cent in accordance with and the proviso to sub-section (1) of section 112 of the I.T. Act read with CBDT Circular 721 dated September 13, 1995.

A 2% education cess and 1% secondary and higher education cess on the total income tax (including surcharge for corporate only) is payable by all categories of tax payers.

Short-term capital gains on the transfer of listed bonds, where bonds are held for a period of not more than 12 months would be taxed at the normal rates of tax in accordance with and subject to the provision of the I.T. Act. The provisions related to minimum amount not chargeable to tax, surcharge and education cess described above would also apply to such short-term capital gains.

Wealth-tax is not levied on investment in bond under section 2(ea) of the Wealth-tax Act, 1957.