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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 LIMITED

IFCI LIMIT...
INE039A09PU9

Price
₹ 1,000,000

Coupon
8.76%

Rating
AA-

Yield
8.03%

NTPC LIMITED

NTPC LIMIT...
INE733E07JV4

Price
₹ 1,000

Coupon
7.53%

Rating
AAA

Yield
6.5%

POWER FINANCE CORPORATION LTD

POWER FINA...
INE134E07562

Price
₹ 1,000

Coupon
7.52%

Rating
AAA

Yield
6.5%

HOUSING AND URBAN DEVELOPMENT CORPORATION LTD

HOUSING AN...
INE031A07949

Price
₹ 1,000

Coupon
8.76%

Rating
AAA

Yield
6.22%

NATIONAL HIGHWAYS AUTHORITY OF INDIA

NATIONAL H...
INE906B07EH2

Price
₹ 1,000

Coupon
7.39%

Rating
AAA

Yield
6%

INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED

INDIA INFR...
INE787H07362

Price
₹ 1,000

Coupon
8.73%

Rating
AAA

Yield
5.7%

NATIONAL HIGHWAYS AUTHORITY OF INDIA

NATIONAL H...
INE906B07EN0

Price
₹ 1,000

Coupon
7.29%

Rating
AAA

Yield
5.7%

HOUSING AND URBAN DEVELOPMENT CORPORATION LTD

HOUSING AN...
INE031A07AS6

Price
₹ 1,000

Coupon
7.29%

Rating
AAA

Yield
5.7%

NATIONAL HIGHWAYS AUTHORITY OF INDIA

NATIONAL H...
INE906B07EG4

Price
₹ 1,000

Coupon
7.14%

Rating
AAA

Yield
5.7%

HOUSING AND URBAN DEVELOPMENT CORPORATION LTD

HOUSING AN...
INE031A07881

Price
₹ 1,000

Coupon
7.19%

Rating
AAA

Yield
5.7%

NTPC LIMITED

NTPC LIMIT...
INE733E07JU6

Price
₹ 1,000

Coupon
7.36%

Rating
AAA

Yield
5.7%

REC LIMITED

REC LIMITE...
INE020B07IF7

Price
₹ 1,000

Coupon
8.44%

Rating
AAA

Yield
5.6%

INDIAN RAILWAY FINANCE CORPORATION LIMITED

INDIAN RAI...
INE053F07827

Price
₹ 1,000

Coupon
7.32%

Rating
AAA

Yield
5.54%

POWER FINANCE CORPORATION LTD

POWER FINA...
INE134E07547

Price
₹ 1,000

Coupon
7.36%

Rating
AAA

Yield
5.5%

NATIONAL HOUSING BANK

NATIONAL H...
INE557F07132

Price
₹ 5,000

Coupon
9.01%

Rating
AAA

Yield
5.31%

Best Convertible Bonds for your investment

Coupon(%):
All BondsIndia

Rating:
All  BondsIndia

Yield(%):
All  BondsIndia

IFCI LIMITED
INE039A09PU9

Price
1,000,000

Coupon
8.76%

Yield
8.03%

Rating
AA-

NTPC LIMITED
INE733E07JV4

Price
1,000

Coupon
7.53%

Yield
6.5%

Rating
AAA

POWER FINANCE CORPOR...
INE134E07562

Price
1,000

Coupon
7.52%

Yield
6.5%

Rating
AAA

HOUSING AND URBAN DE...
INE031A07949

Price
1,000

Coupon
8.76%

Yield
6.22%

Rating
AAA

NATIONAL HIGHWAYS AU...
INE906B07EH2

Price
1,000

Coupon
7.39%

Yield
6%

Rating
AAA

INDIA INFRASTRUCTURE...
INE787H07362

Price
1,000

Coupon
8.73%

Yield
5.7%

Rating
AAA

NATIONAL HIGHWAYS AU...
INE906B07EN0

Price
1,000

Coupon
7.29%

Yield
5.7%

Rating
AAA

HOUSING AND URBAN DE...
INE031A07AS6

Price
1,000

Coupon
7.29%

Yield
5.7%

Rating
AAA

NATIONAL HIGHWAYS AU...
INE906B07EG4

Price
1,000

Coupon
7.14%

Yield
5.7%

Rating
AAA

HOUSING AND URBAN DE...
INE031A07881

Price
1,000

Coupon
7.19%

Yield
5.7%

Rating
AAA

NTPC LIMITED
INE733E07JU6

Price
1,000

Coupon
7.36%

Yield
5.7%

Rating
AAA

REC LIMITED
INE020B07IF7

Price
1,000

Coupon
8.44%

Yield
5.6%

Rating
AAA

INDIAN RAILWAY FINAN...
INE053F07827

Price
1,000

Coupon
7.32%

Yield
5.54%

Rating
AAA

POWER FINANCE CORPOR...
INE134E07547

Price
1,000

Coupon
7.36%

Yield
5.5%

Rating
AAA

NATIONAL HOUSING BAN...
INE557F07132

Price
5,000

Coupon
9.01%

Yield
5.31%

Rating
AAA

Benefits of Investing in Tax–free Bonds

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.

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.

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.

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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.

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Complete your KYC

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Select your Bond

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Make Investment

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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.

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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

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.
Yes, individual investors, including senior citizens, can invest in tax-free bonds.
Yes, capital protection and a source of fixed income make tax-free bonds a safe investment instrument.
Yes, under the Income Tax Act 1961, the income earned from Tax-free bonds is non-taxable.
Only the local and state governments (i.e., municipal bonds) issued bonds are non-taxable.
Investing in tax-free bonds in India is an ideal choice for investors looking to save tax payments.
Yes, you can book a 5-minute call with our experts at BondsIndia for a piece of advice on investment in bonds.
BondsIndia is a professional and hundred percent dependable online platform to trade in bonds.
For information on the best tax-free bonds in India, consult our investment experts at BondsIndia.

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