8 Facts About Tax Free Bonds
Less Liquidity:
Liquidity is less for tax free bonds when compared to a bank fixed deposit because of these bonds are listed on stock exchanges. Investors can exit from these tax-free bonds before the maturity by selling them on stock exchanges. But in some cases, they may be traded very scarcely.
Benefit For Retail Investors:
It is a sigh of relief for retail investors as they can now invest up to 
10 lakh in each issue. Individual investors who are putting in more than 10 lakh are classified as high net-worth individuals. About 40 percent of a public issue is earmarked only for retail investors. The interest earned on these tax-free bonds does not attract tax but investments made in tax-free bonds are not eligible for income tax deductions.
Also, there is no deduction of tax at source (TDS) from the interest earned on tax-free bonds.
Read More: 7 Secrets Of Credit Cards That Mess Up Your Life Real Bad
States Will Have To Finance Loss-Making Discoms: FM Arun Jaitley
