Secondary Mart Trade In Relief Bonds Outside Rs 2 Lakh Limit

The secondary market purchase of Relief Bonds have been kept outside the Rs 2 lakh annual limit for investment in the bonds.

The Reserve bank of India said the secondary market purchases of bonds of earlier series (issued prior to March 1, 2002) and not matured, are not to be treated as fresh investments and included in the per investor annual limit of Rs 2 lakh. Accordingly, it will be open to an investor to purchase bonds, which have not matured, in the secondary market, over and above Rs 2 lakh limit per investor. The RBI has instructed its offices to dispose of the transfer cases pending with them.

 

This will bring in relief for the high net worth individuals who invest in the Relief bonds for its tax-free high returns. Formar finance minister Yashwant Sinha capped investment in Relief Bonds at Rs 2 lakh per investors during this year's budget amid widespread protests.

New finance minister Jaswant Singh has said he would not rollback the decision even though there have been expectations that there will be some relaxations on the Relief Bond front.

"By keeping the secondary market trade outside the ambit of the Rs 2 lakh limit, the government has given some leeway to the high net worth individuals. We expect rush for this instrument in the market," a money market dealer said.