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
OR
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.
Please opine.