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Capital Gains Bond

Apply for SIDBI Capital Gain Bond

SIDBI Capital Gains Bond
SIDBI has been permitted by Government of India to issue Capital Gains Bond under Section 54EC of the Income Tax Act, 1961. SIDBI has accordingly re-launched the SIDBI Capital Gains Bond issue (CGB) on Private Placement basis from April 11, 2005. The issue would be available On-Tap for subscription till SIDBI decides to close the issue.

Advantages of investing in SIDBI Capital Gains Bond
Under Section 54EC of the Income Tax Act 1961, the capital gains arising from transfer of long term capital assets will not be subjected to tax, if within a period of six months from the date of transfer of the asset, the capital gain, as per the provisions of the Income Tax Act, 1961 are invested in the SIDBI Capital Gains Bond.

Broad Terms and Conditions of SIDBI Capital Gains Bond
The broad terms and conditions of the SIDBI Capital Gains Bond are:

a) Instrument Structure

Structure I -
Tenure : 3 years from the deemed date of allotment
Interest Payment : Annual/Cumulative

Structure II -
Tenure: 5 years with PUT & CALL option at the end of 3 years from the deemed date of allotment
Interest Payment : Semi - Annual / Annual / Cumulative

Once an instrument Structure (Structure I/ Structure II) is specified it shall be irrevocable. In case no Structure is specified, the application would be considered under Structure I. Similarly, once an interest option is exercised (Semi Annual/annual payment of interest / cumulative) it shall be irrevocable. In case no interest option is specified, the interest would be paid annually.

Lock in period - 3 years for all the structures

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