Government collects Rs 1,500 crore from 7% tax-free bonds
26 December 2002
New Delhi: The government has collected around Rs 1,500 crore from tax-free bonds, carrying 7 per cent interest rate, in the first two months. The issue of the six-year tenure bonds commenced on 1 October 2002.
Finance Ministry officials expect the total collection to be around Rs 7,000 by the end of the current financial year, that is March 2003.
The total collections from RBI Relief Bonds, carrying 8 per cent interest rate and 7 per cent tax-free bonds, are likely to be around Rs 12,000 crore in 2002-03. While the RBI Relief Bonds are transferable to anybody, the new tax-free bonds are only transferable to close relatives.
The transfer clause for the six-year tax-free bonds is aimed at restricting the facility to genuine investors. The new tax-free bonds with no cap on investment are attractive for those who want to invest more than Rs 2 lakh, which is the cap for investing in the RBI Relief Bonds.