Housing and Urban Development Corporation Ltd (HUDCO) will be issuing tax free bonds from 17th September. HUDCO is a fully owned government company which enjoys healthy finances and business model. Hence these bonds are regarded as safe. Every year select few companies are selected to issue Tax Free Bonds.
The Interest rate scenario changes periodically, currently we are witnessing higher interest rate environment. You have an option to invest for 10, 15 or 20 years. Interest rate applicable for each period is given in table below. For e.g. If you invest rs. 10 lakhs for 15 years, every year you will get interest of Rs. 87,600/- . You are not liable to pay tax on it. This is equivalent of earning 12.68% on your Bank FDs pre tax.
We see good opportunity to lock in your funds for long term at higher yields.
The interest is paid annually. Issue opens on 17th September, Closes on 14th October 2013.
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