For example, if you have a house worth Rs.5 lakhs and you sell it at Rs.10 laks then you make a capital gain of Rs.5 lakhs. You have to pay tax on the profit that you made from selling the house. You have three options open now:
1. To pay the tax on capital gain.
2. To buy another asset.
3. To dispose the money in tax free NHAI capital gain bonds for a long term.
The most attractive option is investing on NHAI capital gain bonds as they are tax free and secure. The bonds have a credit rating of AAA/Stable by CRISIL and IND AAA(Stable) by India Ratings and Research.
The tenure of the bonds are 3 years with a face value of Rs. 10,000/- and coupon rate of 6%. You may feel that NHAI offers a much lower interest rate compared to fixed deposit schemes offered by banks at an interest rate of 8% or even more. But again you need to think that NHAI capital gains bonds are totally tax exempted whereas fixed deposits are taxable.
The minimum application size for NHAI capital gains bonds is one bond of Rs.10,000 while the maximum application size is five hundred bonds of Rs.10,000 each thus amounting to Rs.50,00,000.
In order to apply for the bonds, subscribers have to fill the Application form for the Bonds in block letters in English. For application please click here.
The application form must be submitted along with a demand draft or cheque of the amount decided by the investors to invest on the bonds. The application money is to be paid by way of account payee in favour of "National Highways Authorities of India".
The applicants are required to provide documents like PAN Card, Photocopy of Cancelled cheque, self attested copy of address proof, etc along accompanying the application form and cheque. To know the list of documents to submit click here.
NHAI will verify all the application forms, the accompanying documents and issue the bonds upon its satisfaction. Any incomplete form or form without the demand draft/cheque will be rejected by NHAI. So, the investors must be carefull while filling up the form feeding all the information required along with the cheque or demand draft.
The bonds will be allotted by NHAI on the last day of each month to the applicants whose application form and documents have been received and monies realized and credited in NHAI's New Delhi account till that date.