FinMin allows IRFC to issue Rs 5,000-crore tax-free bonds
BS Reporter / New Delhi Feb 09, 2010, 00:08 IST
The finance ministry today allowed the Indian Railway Finance Corporation (IRFC) to issue Rs 5,000 crore of tax-free bonds, carrying an interest rate in the range of 6.50-7.25 per cent per annum by March 31, 2010.
The interest income on investment in these bonds will be exempt from income tax under item (h) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961 under whose name the bonds would be registered, an official statement said.
“The Central Government have authorised IRFC to issue tax-free, secured, redeemable, non-convertible bonds of the total value of Rs.5,000 crore carrying an interest rate in the range of 6.50 per cent to 7.25 per cent per annum, through public issue or otherwise by 31st March 2010,” the release said.
The government had also allowed the National Bank of Agriculture and Rural Development to float 10-year zero-coupon bonds by end-March. The income on such bonds would be taxed only on maturity as capital gain.
Railway needs much more:
With reference to news item about Railway bonds I will like to say that railway infrastructure needs to get doubled in next 5 years as against previous doubling in more than 63 years. Railway bonds of Rs 5000 crore are drop in the ocean. I will request railway to issue innovative, any money and tax free bonds with 4% interest of Rs 1 lac crore or more. Repayment and interest should be given to investor as railway service and not in cash. This move can provide railway enough money to carry on above mentioned target with bearable liability of Rs 7000 crore or more that too in form of services.
Dr. Alok Sharma,
Morar, Gwalior.
10 Jan 2010
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