Buying a tax free bond | Fusion - WeRIndia

Many people prefer to buy a bond which is tax free. However, most people have no idea how to buy one. Many companies came up with tax free bonds few years ago. Some of these companies include Indian Railways Finance Corporation Tax Free Bonds, HUDCO Tax Free Bonds, National Highways Authority of India etc.

Buying a tax free bond means that the interest you receive from these bonds will be exempted from tax. One does not have to add the amount to the total income for computing tax. One can buy tax free bonds from one’s trading account just as buying shares.

Before you buy a bond it is better to check the price, interest rate, book closure date. This can be done by visiting the website of NSEIndia. In this website you can select the security you wish to purchase. After that select securities information to find out all the possible information regarding interest rate, book closure, expiry of the bond date.

It is most important to note is the price and the interest rate. If you are getting an interest rate of 8.1 per cent and if you buy the bond at Rs 1100, the original price of which was Rs 1000, your yield is going to fall.

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