Benefits Of Tax Free Government Bonds
The advantages of tax-free go beyond the fact that these bonds give you tax-exempt interest. Hereís why you should invest in tax free government bonds:
Assured income: The interest you earn on these bonds is assured every year. You stand to earn tax-free income every year, apart from the principal that will be returned to you on maturity. Only Indian nationals and Hindu Unified Family are allowed to purchase these bonds.
Safety: These bonds are backed by the government of India, which means the likelihood of default is low. Even if a company you bought bonds from goes bankrupt, its assets will be liquidated. As bondholders, you will get your investments back.
Easy trade: The tax free bonds are listed on the stock market. So you can sell your bonds on the market price when the prices appreciate. You stand to benefit in any market appreciation. Higher profit for higher tax bracket: These bonds are an ideal investment option for high net worth individuals. So if you fall in the 30 percent or above tax bracket, you stand to gain more. Additionally there is no upper limit to investment in these bonds.