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Details

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Who can Invest? 

Resident Individuals (including Joint Holdings) and Hindu Undivided Families (HUF). NRIs are not eligible to invest.

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Issue Price  At par – i.e. Rs 1,000 for every Rs 1,000 (nominal) face value

Minimum Amount  Rs 1,000 (Face value) in multiples thereof

Maximum Amount  No maximum limit

Maturity/ Repayment of Principal 7 years (lock-in-period) from the date of issue. Premature encasement shall be allowed to individuals who are 60 years and above subject to minimum lock-in-period.*

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Interest Rate Option available 

Non-cumulative option: Half-yearly interest payouts (1st Aug & 1st Feb) of Rs 38.75 per Rs 1,000 Face value

Cumulative option: Cumulative value of Rs 1,000 at the end of seven years will be Rs 1,703 (based on half-yearly compounding)

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Tax treatment  Interest on these bonds will be taxable under the Income-tax Act, 1961

TDS on interest 

Non-cumulative option: At the time of making payment to investors

Cumulative option: On the interest portion, at the time of payment of the maturity proceeds

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Transferability/Liquidity Not Transferable, Not Tradeable in the secondary market

Eligibility for Collateral Not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions

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Risk  virtually risk free investment option