NHAI Tax Free Bonds are issued by the National Highways Authority of India (NHAI) to fund infrastructure projects. Offering tax-free returns, these bonds are favored by investors seeking tax-efficient investments. With fixed interest rates and specified tenures, NHAI Tax Free Bonds ensure a steady income. Backed by the Indian government, they are considered safe. Investors looking for stable returns often choose NHAI Tax Free Bonds to diversify their portfolios and benefit from tax-free earnings.
Nhai Tax Free Bonds
NHAI Tax Free Bonds are investment instruments issued by the National Highways Authority of India (NHAI) to raise funds for infrastructure development, particularly in the highway sector. These bonds offer investors the benefit of earning tax-free returns on their investment. The interest income earned from NHAI Tax Free Bonds is exempt from income tax, making them an attractive option for those seeking tax-efficient investments.
These bonds typically have a fixed interest rate and a specified tenure, providing investors with a predictable income stream over the investment period. NHAI Tax Free Bonds are considered relatively safe investments due to the backing of the Indian government and the essential nature of infrastructure development for the country’s growth. Investors looking for stable returns and tax benefits often consider NHAI Tax Free Bonds as a viable option to diversify their investment portfolio.
How Do I Buy NHAI Bonds?
To buy NHAI (National Highways Authority of India) Tax Free Bonds, you can follow these general steps
1). Check Eligibility- Ensure you meet the eligibility criteria set by NHAI or the authorized institutions selling the bonds. Generally, individuals, Hindu Undivided Families (HUFs), and certain categories of institutional investors are eligible.
2). Choose Series- Decide which series of NHAI Tax Free Bonds you want to invest in. Different series may have varying interest rates and tenure.
3). Open a Demat Account (if required)- If NHAI bonds are in dematerialized (Demat) form, open a Demat account with a Depository Participant (DP). Not all NHAI bonds are issued in Demat form, so verify the requirements.
4). Contact Authorised Intermediaries- Approach authorized institutions or intermediaries that deal with NHAI Tax Free Bonds. These include banks, financial institutions, designated post offices, and stock exchanges.
5). Get Application Form- Obtain the application form for the desired series of NHAI bonds from the authorized intermediary. This form includes details such as investment amount, personal information, and payment instructions.
6). Complete KYC Process- Fulfill the Know Your Customer (KYC) requirements as specified by the intermediary. This involves providing identity, address, and other necessary documents.
7). Submit Application and Payment- Fill out the application form accurately and submit it along with the required investment amount. Payments can usually be made through cheques, demand drafts, online transfer, or other approved methods.
8). Receive Allotment- After processing your application and payment, you will receive an allotment of NHAI Tax Free Bonds. This may be in physical or Demat form, depending on the bond series and your preference.
9). Hold or Trade- You can choose to hold the NHAI bonds till maturity to receive the tax-free interest payments and the principal amount back. Alternatively, if the bonds are listed on the stock exchange, you can trade them in the secondary market before maturity.
10). Stay Informed- Keep track of important dates such as maturity, interest payment dates, and any updates related to your NHAI bonds. This helps in managing your investment effectively.
What Is the Maximum Amount of NHAI Bonds?
There are two relevant maximum amounts to consider when investing in NHAI bonds.
- Individual Investment Limit- An individual can invest in NHAI bonds per financial year is ₹50,00,000 (fifty lakh rupees). This translates to 500 individual bonds, each with a face value of ₹10,000.
- Issue Ceiling– There is also a total issue ceiling for each NHAI bond issuance. This is the maximum amount of bonds that NHAI can offer in a particular issue. For the current NHAI 54EC Capital Gain Bonds, issued 2022-23 (Tr-XXIII), the ceiling is ₹6,000 Crore (six thousand crore rupees). This means that once the total investment reaches this limit, the issue will be closed, even if everyone hasn’t reached the individual investment limit.
Which Banks Are Collecting NHAI Bonds?
Here are the banks currently collecting NHAI bonds
Public Sector Banks-
- Union Bank of India: All branches
- Canara Bank: Specified branches
- IDBI Bank: Specified branches
Private Sector Banks-
- HDFC Bank: All branches
- Axis Bank: Specified branches
- ICICI Bank: Specified branches
Get List of Specified Branches Click Here
What Is the Interest Rate of NHAI Bonds?
The interest rate of NHAI (National Highways Authority of India) Tax Free Bonds can vary depending on the specific series and the prevailing market conditions at the time of issuance. Generally, these bonds offer competitive interest rates, often ranging from around 5% to 7% per annum.
Bottomline:-
NHAI Tax Free Bonds offer investors a tax-efficient way to invest in infrastructure development through the National Highways Authority of India. With attractive tax-free returns and the backing of the Indian government, these bonds provide a stable and secure investment option for those seeking steady income and tax benefits. NHAI Tax Free Bonds are particularly appealing to individuals looking to diversify their portfolios while contributing to the growth of essential infrastructure in the country.
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