What makes Tax-free bonds a good investment tool?

The benefit of tax exemption, longer tenure, good interest rate, and more makes Tax-free bonds a good investment tool for different type of investors.

Home / Bonds / tax Free Bonds

What are Tax-Free Bonds?

Average returns7.51%

Average Yield5.20%

Min. Investment₹1,000

What are Tax-Free Bonds?

Tax-free bonds are generally government-owned securities wherein the interest amount derived by the investor is fully exempted from the Income Tax and shall not form part of the Total Income as per provisions under section 10 of the Income Tax Act India.

Best Convertible Bonds for your investment

Top Bonds		Coupon(%)	Rating	Yield(%)
IFCI LIMIT... INE039A09PU9	Price ₹ 1,000,000	Coupon 8.76%	Rating B+	Yield 8.03%	INVEST NOW
INDIAN REN... INE202E07120	Price ₹ 1,000	Coupon 8.55%	Rating AAA	Yield 7.6%	INVEST NOW
NATIONAL H... INE906B07EE9	Price ₹ 1,000,000	Coupon 7.11%	Rating AAA	Yield 7.18%	INVEST NOW
NATIONAL B... INE261F07024	Price ₹ 1,000	Coupon 7.29%	Rating AAA	Yield 5.8%	INVEST NOW
NATIONAL H... INE906B07EG4	Price ₹ 1,000	Coupon 7.14%	Rating AAA	Yield 5.7%	INVEST NOW
POWER FINA... INE134E07547	Price ₹ 1,000	Coupon 7.36%	Rating AAA	Yield 5.7%	INVEST NOW
HOUSING AN... INE031A07AS6	Price ₹ 1,000	Coupon 7.29%	Rating AAA	Yield 5.7%	INVEST NOW
INDIA INFR... INE787H07362	Price ₹ 1,000	Coupon 8.73%	Rating AAA	Yield 5.7%	INVEST NOW
NTPC LIMIT... INE733E07JU6	Price ₹ 1,000	Coupon 7.36%	Rating AAA	Yield 5.7%	INVEST NOW
POWER FINA... INE134E07125	Price ₹ 100,000	Coupon 7.75%	Rating AAA	Yield 5.4%	INVEST NOW
HOUSING AN... INE031A07949	Price ₹ 1,000	Coupon 8.76%	Rating AAA	Yield 5.39%	INVEST NOW
REC LIMITE... INE020B07HS2	Price ₹ 1,000	Coupon 8.71%	Rating AAA	Yield 5.39%	INVEST NOW
NATIONAL H... INE557F07132	Price ₹ 5,000	Coupon 9.01%	Rating AAA	Yield 5.39%	INVEST NOW
REC LIMITE... INE020B07HN3	Price ₹ 1,000,000	Coupon 8.46%	Rating AAA	Yield 5.3%	INVEST NOW
INDIAN RAI... INE053F07785	Price ₹ 1,000,000	Coupon 7.15%	Rating AAA	Yield 5.3%	INVEST NOW

Best Convertible Bonds for your investment

Rating
All

Coupon(%)
All

Yield(%):
All

IFCI LIMITED
INE039A09PU9

Price
₹ 1,000,000

Coupon
8.76%

Yield
8.03%

Rating
B+

INVEST NOW

INDIAN RENEWABLE ENE...
INE202E07120

Price
₹ 1,000

Coupon
8.55%

Yield
7.6%

Rating
AAA

INVEST NOW

NATIONAL HIGHWAYS AU...
INE906B07EE9

Price
₹ 1,000,000

Coupon
7.11%

Yield
7.18%

Rating
AAA

INVEST NOW

NATIONAL BANK FOR AG...
INE261F07024

Price
₹ 1,000

Coupon
7.29%

Yield
5.8%

Rating
AAA

INVEST NOW

NATIONAL HIGHWAYS AU...
INE906B07EG4

Price
₹ 1,000

Coupon
7.14%

Yield
5.7%

Rating
AAA

INVEST NOW

POWER FINANCE CORPOR...
INE134E07547

Price
₹ 1,000

Coupon
7.36%

Yield
5.7%

Rating
AAA

INVEST NOW

HOUSING AND URBAN DE...
INE031A07AS6

Price
₹ 1,000

Coupon
7.29%

Yield
5.7%

Rating
AAA

INVEST NOW

INDIA INFRASTRUCTURE...
INE787H07362

Price
₹ 1,000

Coupon
8.73%

Yield
5.7%

Rating
AAA

INVEST NOW

NTPC LIMITED
INE733E07JU6

Price
₹ 1,000

Coupon
7.36%

Yield
5.7%

Rating
AAA

INVEST NOW

POWER FINANCE CORPOR...
INE134E07125

Price
₹ 100,000

Coupon
7.75%

Yield
5.4%

Rating
AAA

INVEST NOW

HOUSING AND URBAN DE...
INE031A07949

Price
₹ 1,000

Coupon
8.76%

Yield
5.39%

Rating
AAA

INVEST NOW

REC LIMITED
INE020B07HS2

Price
₹ 1,000

Coupon
8.71%

Yield
5.39%

Rating
AAA

INVEST NOW

NATIONAL HOUSING BAN...
INE557F07132

Price
₹ 5,000

Coupon
9.01%

Yield
5.39%

Rating
AAA

INVEST NOW

REC LIMITED
INE020B07HN3

Price
₹ 1,000,000

Coupon
8.46%

Yield
5.3%

Rating
AAA

INVEST NOW

INDIAN RAILWAY FINAN...
INE053F07785

Price
₹ 1,000,000

Coupon
7.15%

Yield
5.3%

Rating
AAA

INVEST NOW

Benefits of Investing in Tax–free Bonds

Exemption from Tax

The income earned from the investment made in Tax-free Bonds is exempt from tax under the Income Tax Act of 1961. Also, no TDS applies to it.

Longer Tenure

Tax-free Bonds come with a tenure ranging from 10, 15, or 20 years. The longer tenure facilitates the interest income for a longer period useful for senior citizens.

Interest Rate Income

The rate of interest offered to investors holding tax-free bonds generally ranges from 5.50 to 6.50%, which is comparatively good considering the tax benefit. You can know the tax free bonds yield to plan your varied goals in your life.

Why invest in BondsIndia?

Price Discovery
Real Time

Seamless Digital KYC
100%

Assured Transaction
Real Time

INVEST NOW

Get a call back from us!

How to Invest in Tax Free bonds

Investment in Bonds can be done in a few easy steps with Quick KYC, Bond Selection and a convenient payment gateway.

Complete your KYC

Click Here

Select your Bond

Click Here

Make Investment

Click Here

Transaction securely processed Via Exchange

Each transaction undergoes processing through BSE, NSE and RFQ exchanges with settlement facilitated by ICCL & NSCCL – both regulated by SEBI, ensuring a secure, risk-free, and fully protected financial transaction.

Our Valuable Partners

We are grateful for the invaluable partnerships we have, That is built on trust, mutual support, and shared success. – (Time being)

“Experience an efficient sales process that is strengthened by adherence to regulatory standards and the unwavering support of our trusted partners, ensuring a seamless and reliable journey for our valued customers. “

Features of Tax-free Bonds in India

Exemption from Taxes  - The tax income under Tax free bonds is completely exempted. As well as TDS (Tax Deducted at Source) doesn’t apply to such bonds. Resulting it proves to be a very good investment option for tax free interest income.
Risk Factors – The possibility of default payment on either principal or interest amount is considerably very low because the Government strongly backs these schemes.
Lock-in Tenure - Tax-free bonds generally have more extended lock-in periods ranging from a minimum of 10 years to a maximum of 20 years. The investor cannot withdraw their money before the maturity period or before the locking period.
Liquidity - The investor cannot benefit from liquidating the tax free bonds whenever they have the requirement for funds. So, keep in mind that you do not require the money you invest under these bonds in the near future.
Returns - Returns derived from these bonds are mainly dependent on the purchase price. The reason behind that these are traded at low volume and with a limited number of buyers.
Interest  - The offered Interest rates on tax-free Bonds to the investor generally range from (5 to 5.5%) which is quite attractive.

Frequently Asked Questions

How to buy tax-free bonds in 2023?

The investor can buy tax-free bonds easily by researching the current market price of the bonds they are interested in and deciding upon the quantity. And after deciding, the investor can place the order through the Broker.

Can individual investor invest in tax-free bonds?

Yes, individual investors, including senior citizens, can invest in tax-free bonds.

Is it safe to invest in tax-free bonds?

Yes, capital protection and a source of fixed income make tax-free bonds a safe investment instrument.

Are Tax-free bonds non-taxable?

Yes, under the Income Tax Act 1961, the income earned from Tax-free bonds is non-taxable.

What bond types are non-taxable?

Only the local and state governments (i.e., municipal bonds) issued bonds are non-taxable.

How about investing in tax-free bonds in India?

Investing in tax-free bonds in India is an ideal choice for investors looking to save tax payments.

Can I seek expert advice on bonds at BondsIndia?

Yes, you can book a 5-minute call with our experts at BondsIndia for a piece of advice on investment in bonds.

How safe and dependable is BondsIndia?

BondsIndia is a professional and hundred percent dependable online platform to trade in bonds.

Which are the best tax-free bonds in India?

For information on the best tax-free bonds in India, consult our investment experts at BondsIndia.

Got more questions?

Book 5 Minutes Discussion with our Financial Expert

SCHEDULE A DISCUSSION

+91-8882-200-300

Webinar Closed

Rebalancing your investment - the fixed income effect

Sat, 07 Jan 2023

12:00 - 01:00 PM IST

REGISTRATION CLOSED

Webinar Closed

Rebalancing your investment - the fixed income effect

Sat, 07 Jan 2023

12:00 - 01:00 PM IST

REGISTRATION CLOSED

Running out of
time? Stay in the Loop!

Make sure to subscribe for the latest updates before anybody else.

By clicking on 'Subscribe Now', I agree to BondsIndia's Privacy Notice
and Terms of Use.

#BondsSimplified

BondsIndia is a brand name of Launchpad Fintech Private Limited, an e-business platform for Fixed Income securities that uses technology as a means to provide quality & real-time financial solutions to users.

Products

Resources