Personal 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.

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 assessee 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.

1. Investing in a New House Property:

Here the investor can park the amount earned by selling the property in a CGAS (Capital Gain Account Scheme) account in any nationalized bank within 6 months of selling the property. This amount must either be used for buying a new house within 2 years of parking the amount in the account or can be used for constructing a new house within 3 years of parking the amount in the CGAS account. i.e. the investor is not left with an option of redeeming the money for any other purposes other than buying a new house or in constructing a new one.

2. 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 The amount invested in these types of bonds can be withdrawn after the tenure of 36 months along with the interest earned i.e at a guaranteed rate of interest of 6%.Unlike investing the amount in buying or constructing a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.



Tax Free Bonds:

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



Click here for downloading the application forms and details of NHAI Capital Gain Bonds for the FY 2013-2014.

Click here for downloading the application forms, product notes and collection banker details of REC Capital Gain Bonds for the FY 2013-2014



http://www.ifinltd.in/NHAICGB13s/South-Indian-Bank/451

http://www.ifinltd.in/RecCGB13s/South-Indian-Bank/448

For further details contact: HO-Marketing Department

Email Id: ho2013@sib.co.in

Ph: 0484-2384503

Contact Address:

HO-Marketing 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- 2933560,Email: ho2013@sib.co.in