BENGALURU: Each and everyone thinks of buying tax free bonds but are unable to get it. These bonds are usually issued by government-backed entities to raise long-term funding for infrastructure projects. The government has now allowed seven state-owned entities, including National Highways Authority of India (NHAI), Indian Railway Finance Corporation (IRFC) and National Thermal Power Corporation Ltd (NTPC), according to ndtv.com

Here are some facts about these Tax Free Bonds.

Experts Opinion:

Tax-free bonds always remain an attractive option for individuals in the higher tax bracket and eliminate the reinvestment risk in an environment where interest rates are expected to trend lower. Reinvestment risks imply the probability of interest rates going lower in the future.

Capital Gains:

Here Capital gains made by selling of tax-free bonds on stock exchanges are also taxed. If the holding period is less than 12 months, capital gains on sale of tax-free bonds on stock exchanges are taxed as per the tax slab of the investor. If bonds are held for more than 12 months, the gains are taxed at 10 percent.

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