NRI BankingValue Added ServicesDistribution of Capital Gain Bonds & Tax Free Bond

IFIN-SIB partnership for the distribution of Capital Gain Bonds, Tax Free Bonds & Infrastructure Bonds

South Indian Bank has been enrolled as a Channel Partner for the distribution of the bonds issued by different companies, through our tie up with IFIN- a subsidiary of IFCI (Industrial Financial Corporation of India) Financial services Limited is a distributor.

Role of SIB as a Channel Partner for the distribution of Bonds issued by IFIN:
Through a tie up with IFIN, South Indian Bank has been enrolled as a channel partner of IFCI for the distribution of:
1. Capital Gain Bonds.
2. Tax free Bonds.

1.Capital Gain Bonds:
Capital gains bonds are issued by specified institutions and tax benefits are available under Section 54EC of the Income Tax Act.
If the investor sells a property i.e. house or real estate, after three years time period the profit earned attracts long term capital gains tax at a rate of 20%(after indexation). The investor can choose to get exemption from this long term capital gain tax in 2 ways: i.e. either by investing the amount in buying or constructing a new house property within 2/3 years of selling the house AND/OR investing in Capital Gain Bonds.

  • Investing in Capital Gain Bonds:

For capital gains arising out of sale of property, a person has to pay long term capital gains at the rate of 10% without indexation or 20% with indexation benefit.
Section 54EC exempts tax on capital gains if the profit earned by selling the property (the property should have been owned by the investor at least for a period of 3 years termed as long term capital) is invested in specified bonds within six months from the date of sale. The amount invested in these types of bonds can be withdrawn after the tenure of 5 years. Unlike investing the amount in buying or constructing a new house or property, the amount with drawn from the Capital Gain Bond investment after the tenure can be utilized for any purposes which is the major highlight of these types of bonds. The face value of these bonds is Rs 10,000/- and the full amount has to be paid upfront along with the application. The maximum amount that can be invested in these types of bonds is Rs 50, 00,000/- during the financial year.

2.Tax Free Bonds:
It may be noted that TDS will not be applicable for interest earned under Tax Free bonds. The issuance of Tax free bonds vary from time to time.

For further details contact: HO-Retail Banking Department
Contact Address:
Retail Banking Department
The South Indian Bank Ltd.
2nd Floor, Do.No.4/461 A,
Shanu Towers,
Opp. Appollo Tyres, Premier Jn
Kalamassery, Ernakulam
Kerala Pin Code: 683104
Ph: 0484- 2933538
Email: [email protected]