Consider the following statements with regards to inflation indexed bonds (IIBs).
Which of the above statements are NOT correct?
Consider the following statements with regards to inflation indexed bonds (IIBs).
Which of the above statements are NOT correct?
The correct option is C 1 and 3 only
Inflation Indexed Bonds (IIBs) were issued in the name of Capital Indexed Bonds (CIBs) during 1997. The CIBs issued in 1997 provided inflation protection only to principal and not to interest payment. IIBs will provide inflation protection to both principal and interest payments. Tax provisions will be applicable on interest payment and capital gains on IIBs. There will be no special tax treatment for these bonds. IIBs would be Government securities (G-Sec) and the different classes of investors eligible to invest in G-Secs would also be eligible to invest in IIBs. FIIs would be eligible to invest in the IIBs but subject to the overall cap for their investment in G-Secs (currently USD 25 billion).
1 and 3 only
Inflation Indexed Bonds (IIBs) were issued in the name of Capital Indexed Bonds (CIBs) during 1997. The CIBs issued in 1997 provided inflation protection only to principal and not to interest payment. IIBs will provide inflation protection to both principal and interest payments. Tax provisions will be applicable on interest payment and capital gains on IIBs. There will be no special tax treatment for these bonds. IIBs would be Government securities (G-Sec) and the different classes of investors eligible to invest in G-Secs would also be eligible to invest in IIBs. FIIs would be eligible to invest in the IIBs but subject to the overall cap for their investment in G-Secs (currently USD 25 billion).
