Is entire money invested in Tax Free Bonds tax free ?

POSTED BY Ram ON October 31, 2012 11:59 am COMMENTS (4)

Dear All

Can somebody suggest me on …

How about investing in tax-free bonds? Entire money invested and interest earned is considered as Tax free?

How tax-free bonds compare with PPF?

Regards, Ram

4 replies on this article “Is entire money invested in Tax Free Bonds tax free ?”

  1. Dear Ram, the tax free bonds in general are more beneficial for HNIs not for common retail investors. The interest received by you is tax free but in case you sell the bond in the market, before the completion of actual redemption period by the bond issuer, the gains if any ‘ll be LTCG & taxed @ 10.3% with out indexation or 20.6% with indexation.

    Thanks

    Ashal

  2. Dominic Prakash says:

    http://localhost/jagoforum2/tax-free-bonds-2/5236/

    Money invested in these bonds are NOT tax free. But the interest is.
    Money invested in PPF can be claimed in your tax return.

    You can sell these bonds in the market and not PPF. Your need to wait for 1few years for partial withdrawal and 15 years for full.

    These bonds give about 8-8.3% return. PPF gives 8.6 or 8.8 (not sure) and it might change (+ or -) in April 2013.

  3. Dominic Prakash says:

    http://localhost/jagoforum2/tax-free-bonds-2/5236/

    Money invested in Tax free bond is NOT tax free. That is you cannot claim in your returns. But the interest is tax free.

    Money invested in PPF can be claimed in your tax return if it is within 80C.

    The above tax free bonds gives about 8 to 8.3% return. PPF would give you 8.6% currently and might change in April 2013.

    You can sell your tax free bonds anytime But PPF you need to wait for few years for partial withdrawal and 15 years for full amount.

  4. Can you name some tax free bonds ? Which one are you talking about ?

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