6.6% tax-free bonds for 7 UTI schemes soon

The government will soon come up with Rs 5,000 crore (Rs 50 billion) bonds, offering a tax-free return of 6.6 per cent for investors in seven assured return schemes of the Unit Trust of India.

The bonds would be offered as a conversion option to investors of seven schemes which are being foreclosed from April 2004, official sources said on Friday.

The Specified Undertaking of UTI (SUUTI) is coming out with tax-free bonds for premature closure of seven assured return schemes -- Children's Gift Growth Fund of 1986 (CGCF-86), Children Gift Growth Fund of 1999 (CGCF-99), Bhopal Gas Victims MIP 1992 (BGVMIP), Monthly Income Plan of 1998 and 1999, Rajlakshmi Unit Plans of 1994 and 1999, they said.

UTI has obtained highest safety 'LAAA(SO)' rating from credit rating agency ICRA for the bonds.

The value of bonds provided would be equal to the assured value of the units as on March 31, 2004.