It is the season for Tax Free bonds again .. make no mistake these are not tax saving bonds . These bonds cannot be used for your 80CCC tax saving (These bonds are no more there .. they have scrapped from this year ), But the interest earned on these Bonds are completely tax-free .
These Bonds are an ideal tax saving instrument for people in 30% tax bracket as they would otherwise have to pay tax of 30% of interest earned from their FD interest earnings
These Bonds are issued for a duration of 10,15,20 years and have no lock-in period and can be sold any time on the stock exchanges , so they need to be held in Demat form
Two issue from REC and PFC have sailed through and IIFCL is currently open for subscription and plenty more are in the queue
The Interest rate offered this year is lower compared to last and is in the range of 7.5-8.0 % for a retail (small ) investor .. any investor investing less than Rs. 10 Lakhs is considered a small investor.
My Simple Money Life 