​​​
  1. Tax-free bonds can have higher returns than bank rates

Tax-free bonds can have higher returns than bank rates

Tax-free bonds can provide returns that are higher than the prevailing interest rates offered...

By: | New Delhi | Published: April 10, 2015 9:21 PM
direct tax, direct tax target, Tax collection target, tax FY15, Kotak Institutional Equities, GDP, business news

The Corporate Affairs Ministry has said that tax-free bonds providing more yield than prevailing bank rates would not violate provisions of the Companies Act.

Tax-free bonds can provide returns that are higher than the prevailing interest rates offered by banks.

The Corporate Affairs Ministry has said that tax-free bonds providing more yield than prevailing bank rates would not violate provisions of the Companies Act.

The ministry has provided clarity on the matter at a time when many entities, including the Railways, are looking to raise funds by way of issuing tax-free bonds.

“In cases where the effective yield (effective rate of return) on tax-free bonds is greater than the prevailing yield of one year, three-year, five-year or ten-year government security closest to the tenor of the loan, there is no violation of… Companies Act, 2013,” it said in a circular issued on Thursday.

Earlier this week, Finance Minister Arun Jaitley said the proposal to allow railways and highways to issue tax-free bonds has been cleared.

“I today cleared a proposal for both (highways and railways) these sectors to have a large investment by way of tax-free bonds,” he had said.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Tags: Indian Bonds
  1. No Comments.

Go to Top