Monday, 14 October 2013

Smart things to know about tax-free bonds

1. The tax-free bonds are issued by public-sector entities and have a high credit rating.

2. The interest earned from these bonds is tax-free, making them attractive on a tax adjusted basis for investors in the high tax brackets. 

3. Individual investors, Hindu Undivided Families (HUFs), high net worth individuals, and corporates can invest in such bonds.

4. The investors applying for an amount of up to `10 lakh fall under the retail individual investor category, and are eligible for a marginally higher coupon rate.

5. The bonds are listed on stock exchanges within 15 days of the closure of the issue. Investors can sell the bonds in the demat form, subject to a lock-in period, if any.

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