Know NHAI Dec 2015 Tax Free Bonds | Fusion - WeRIndia

Starting from December 15, the National Highways Authority of India (NHAI) is launching a tax free bond offer for Rs.10,000 crore. With these tax free bonds, there is a significant offer compared to the previous tax free bonds. With these bonds a lot of retail investors can get subscriptions.

Previous tax free bonds from IRFC, REC and Power Finance left investors a little disappointed. However, this is the largest tax free bond offering so far.

With these bonds, retail investors will get an interest rate of between 7.39-7.60 per cent per annum on with 10-15 year maturities. If one is in the 20 per cent tax bracket, then they can get a post-tax yield of 6.4 per cent on a bank fixed deposit. This yields 8 per cent interest.

Furthermore, if one is in the 30 per cent tax bracket, then they would get a post-tax yield of just 5.6 per cent. All in all, one can get around 7.39-7.60 percent returns on the NHAI Dec 2015 Tax Free Bonds. This is significantly higher than post tax yields of bank deposits.

Those who are not paying taxes are recommended to avoid the issue of these bonds. However, they pose a lot of uses for those who are under any of the tax brackets. One of the main reasons to go for these bonds is because the interest rates in the economy are falling. This means that if one were to invest now at the current rates, then they will be locking in money at such high interest rate for 10-15 years. This means that one does not have to worry about their money or returns for such long time. So, even if interest rates fall in the near future, the money is already safe at very high interest rates.

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