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Tax Free Bonds 2013 - 2014

The Central government, in exercise of its powers conferred under Section 10 (15) (iv) (h) of the Income tax Act, 1961, has authorized the above entities to issue tax-free, secured, redeemable, non-convertible bonds of an aggregate amount of Rs. 48,000 Cr. during the FY2013-14.

Some of the public undertakings that will be raising funds are REC, IIFCL, PFC, HUDCO, NHB, NHAI, NTPC, NHPC, IRFC, IREDA, AAI and Cochin Shipyard.

 
Tax Free Bonds Likely Features

  • Period option : Choice of 10 years, 15 years & 20 years
  • Proposed to be listed on NSE / BSE
  • Bond Issues are Secured in nature, hence safe investment
  • Either in Demat or Physical form
  • PAN is Mandatory
  • Tax-Free interest income
  • Low risk, since companies have a better credit rating
  • Listing of bonds on various exchanges can provide liquidity to your investments
  • Option of holding bonds in 'Demat Form' makes your investments easy to handle & monitor
  • Ratings by agencies like CARE, FITCH, CRISIL, ICRA

Pre Tax Yield Calculation For Tax Free Bonds

Retail

Tenure   Coupon (%)

 

Pre Tax Return
(for 10.30% slab)
 

Pre Tax Return
(for 20.60% slab)

  Pre Tax Return
(for 30.90% slab)
10   8.66   9.65   10.91   12.53
15   8.73   9.73   10.99   12.63
20   8.91   9.93   11.22   12.89

HNI

10   8.41   9.38   10.59   12.17
15   8.48   9.45   10.68   12.27
20   8.66   9.65   10.91   12.53
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