POSTED BY December 25, 2011 3:49 am COMMENTS (20)ON
After reading about the NHAI Bonds Issue I am curious to get others view on the following comparison:
a) Investing in this Bond for 10 years at 8.2% where the interest is non-taxable and paid out annually
b) Making a cumulative Fixed Deposit of 10 years at 8.75% where the interest is compounded quarterly and taxable
My calculations revealed that for an investment of 50,000 (min. investment amount in the Bond):
Option (a) would earn annually approx 4100 as tax-free interest and
Option (b) would earn in 2022 a taxable interest of approx 69000.
I understand that these figures do not account for inflation over the next decade. Also that there is scope for speculation on what the taxation laws might be in 2022.