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What is the procedure for redeeming IDFC infrastructure bonds?
The redemption amount will be paid to all Bondholders (Physical and Demat) primarily through NACH (National Automated Clearing House) or any other electronic mode of payment, subject to the availability of complete bank account details, including the bank account number (confirming CTFS), IFSC Code, and Magnetic Ink.
What is the procedure for redeeming an infrastructure bond?
Bonds are redeemed Registered bondholders relinquish their legally discharged bond certificates (by signing on the reverse of the bonds with a Revenue Stamp of Re. 1/-) on the date of maturity. The redemption record date is one month before the deemed encashment / redemption date.
What happens when infrastructure bonds reach their maturity date?
As a result, the tax-advantaged long-term infrastructure bonds were not really tax-free bonds.
The annual interest payout option and the cumulative interest option were both available to the investors.
While investors who chose annual interest distributions have already paid tax on the amount of interest received, those who chose the cumulative option would pay more tax in the year of investment than they saved in the year of investment.
Confusion over Tax-Saving vs. Tax-Paying Infrastructure Bonds
Taxpayers who take advantage of free bonds end up paying more in taxes than they receive in benefits.
Taxation
Because the interest on long-term infrastructure bonds is taxable, the interest earned by the investors annually for those who chose the annual option and aggregate on maturity for those who chose the cumulative option will be added to their taxable income.
As a result, tax payable will be lower for investors in lower tax bands and higher for those in higher tax brackets.
TDS
For Resident taxpayers who choose the cumulative option in physical format, the interest payment will be subject to a 10% Tax Deducted at Source (TDS) if the interest payment upon redemption exceeds Rs 5,000.
The TDS rate will increase to 20% if the bondholder does not have a valid PAN or if the investor has not submitted his tax returns for the last two years and the total TDS and TCS in each of those years is Rs 50,000 or higher.
TDS of 31.2 percent would be applied to interest payouts for non-resident taxpayers.
How to save TDS
Resident bondholders must submit Form 15G / 15H, as appropriate, to avoid TDS. Those who did not disclose their PAN data at the time of investment must update their PANs with the various RTAs within the time frames set by the bond issuers.
Non-Resident bondholders must submit a tax officer’s order under Section 197 / 195 setting NIL / lower TDS rates to the appropriate RTAs before the deadline to guarantee that TDS is collected at the rates provided in the order.
Fill out the transaction paper that arrives at the bottom of your account statement and submit it to your fund house or registrar and transfer (R&T) agent to redeem your mutual fund (MF) units, and you’re done. However, getting your dematerialized (demat) units back can be difficult.
Your fund house creates demat units and deposits them in your demat account after you purchase them on the stock exchange or in any other way. Your fund house has no authority over them after that; your depository participant (DP) is in charge. This means that the only way to redeem these units is to travel to a DP. Your fund house’s R&T only keeps track of the units that appear on the statement of account (SOA) form.
The demat account world was envisioned as a paperless world where investments would be held in an electronic format. Initially, only equity shares were kept in demat form, but non-convertible debentures, bonds, and presently even mutual funds are also held in demat form.
The demat format also has the advantage of allowing you to see all of your investments in one account statement. Having demat units, on the other hand, means that your DP is in charge of holdingand so controllingall of your dematerialized investments on your behalf.
Here’s an illustration of how this layout will affect you. Let’s say you wish to secure a loan by pledging certain MF units (kept in demat form) to a bank. You must notify your DP, not your fund house, in order to do so. Your fund manager will have no idea if you’ve pledged or sold your units. Your fund house only pulls information from your DP to determine the number of units in your account when it releases a dividend or bonus units. It uses this information to calculate your dividend.
If you have an ongoing systematic investment plan (SIP) in your demat-held MF schemes and want to close your account completely, first cease your SIPs. If you have started your SIP with the fund house, a simple letter to the fund house would suffice. You must contact your broker if you started your SIP using a stock exchange platform broker. Allow your fund house roughly 30 days to close your SIP before redeeming your units and closing your account.
To begin, complete a redemption slip. Even if you purchased “direct plan” units, a redemption slip to your DP would suffice. Otherwise, contact your broker. Once your application is approved, the units will be removed from your account and you will receive your funds. This procedure takes about two to three days.
When a bond reaches maturity, how do you redeem it?
Your link has finally matured after three decades of waiting. If you wish to cash in your bonds, you must follow specific requirements depending on the type of bond you have (paper or electronic).
- You can cash electronic savings bonds on the TreasuryDirect website, and you’ll get your money in two days.
- Most major financial institutions, such as your local bank, accept paper savings bonds.
If you can’t find your fully matured paper savings bond, you can have it electronically replaced by going to the TreasuryDirect website and filling out the necessary papers.
You’ll need the serial number of the bond, which serves as a unique identity. If this isn’t accessible, you’ll need other information, such as the exact month and year the bond was purchased, the owner’s Social Security number, and the names and addresses of the bond’s owners. Even if you’ve misplaced the bond, it’s possible to find it with a few efforts.
You can keep your bond after it matures, but you will not get any extra interest. On the one hand, because you can’t spend a savings bond without redeeming it, the value of your bonds is considered “secure.” On the other side, if your bond isn’t redeemed, you’ll miss out on additional sources of interest. With current inflation rates, it doesn’t make much sense to hold a bond that pays nothing and is losing money to inflation every day.
Finally, regardless of whether you redeem your bonds or not, you will owe taxes on them when they mature. In the year of maturity, make sure to include all earned and previously unreported interest on your tax return. If you don’t, you may be subject to a tax penalty for underpayment.
Who is the IDFC infrastructure bonds registrar?
Investors have received their allotment advice / bond certificate(s) for all IDFC FIRST Bank Infra bond issuance.
If you have not received your allocation advice/bond certificate, please write to the Registrar, i.eKFin Technologies Pvt. Ltd. (as per Format-V below).
For Bond Certificates: Based on your letter (Format V above), the Registrar (KFin Technology) will check on bond certificate postal returns at their end and, if discovered, verifies signatures and PAN details as provided in your letter and resend the Certificate to you.
If the Registrar cannot locate the document, you must follow the steps outlined in Serial No. 10 (Your Question) below.
For Allotment Advise: We will offer an allotment advice when we have thoroughly verified your details as submitted by you in Format V with the data we have on file.