If you are in the 20 and 30 per cent tax bracket with substantial income through interest from fixed interest yielding instruments, it's time you put money in tax free bonds. The tax free bonds are listed on the NSE and some on the BSE and the interest income is free from tax. Here are 5 great tax free bond ideas.
HUDCO N2 Series Tax Free Bonds
The HUDCO N2 Series Tax Free Bonds are currently traded at Rs 1125. They carry a coupon rate of 8.2 per cent, with the interest being payable in the month of March. Being a government owned entity the bonds are very secure.
IRFC N2 Tax Free Bonds
The Tax Free Bonds from IRFC attract an interest rate of 8.1 per cent and are currently traded at Rs 1065. The Interest has already been paid on Oct 15, 2014. Indian Railways Finance Corporation is a government of India owned company and hence the bonds are very safe.
NHAI N1 Series
The National Highways Authority of India Bonds attract an interest rate of 8.2 per cent. The interest is payable on Oct 1 each year and the Bonds are traded at Rs 1070 on the NSE.
REC N5 Series
The REC N5 Series attract an interest rate of 8.01 per cent. The Bonds are traded at NSE and have a AAA rating. In any case it's a government owned entity and the bonds are very safe.
HUDCO N3 Series Tax Free Bonds
The HUDCO N3 Series Tax Free Bond attract carry an interest rate of 8.1 per cent. The Bonds are currently traded at Rs 1092 on the NSE and mature in 2022.Again, a decent coupon rate for those in the highest tax bracket.