one of our client had redeemed Sardar Sarovar Bonds in AY 2009-10. Bonds were redeemed for 2,00,000/-. The redemption was made by the govt before the due date. Bonds were purchased in secondary market.
the warrant shows the following details
Principal Amount -14,400/- Interest Amount -1,85,600/-
also, in TDS column, it is mention as "NIL Exempt". What is the meaning of this?
What are the tax implications on the redemption of the Bonds?
15 June 2011
In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of section 10, the Central Government has specified the following bonds for the purposes of said item :
Provided that the benefit under the said item shall be admissible only if the holder of such bonds registers his name and the holding with the said corporation :
SO 953(E) 9-9-2002 Tax free Bonds Series -1B of rupees one lakh each, tax free Bonds Series -1B of rupees one lakh each, tax free bonds Series II-A of rupees ten thousand each and tax free Bonds Series IIB of rupees ten thousand each issued by SARDAR SAROVAR Narmada Nigam Limited carrying an interest of 9.20%, 9.50%, 9.20% and 9.50% per annum for a period of 5, 7, 5 and 7 years respectively for a total amount of rupees 500 crores with following details :
Series Amount Distinctive Number
1. I-A Rupees seventy-five crores 1-7500
2. I-B Rupees one hundred twenty-five crores 7501-20,000
3. II-A Rupees one hundred twenty-five crores 20,001-1,45,000
4. II-B Rupees one hundred seventy-five crores 1,45,001-3,20,000
if the bonds fall in above then interest is exempt
CAclubindia
