{"id":4484,"date":"2022-09-16T11:52:28","date_gmt":"2022-09-16T11:52:28","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=4484"},"modified":"2026-04-14T04:53:17","modified_gmt":"2026-04-14T04:53:17","slug":"what-are-tax-free-bonds","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/","title":{"rendered":"What are Tax free bonds?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Most of us might be worried about paying high taxes on our investment returns and looking for investment options which may have tax-free. There are several tax-free bonds available.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_are_tax-free_bonds\" >What are tax-free bonds?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_are_advantages_of_Tax-free_bonds\" >What are advantages of Tax-free bonds?\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Tax-exemption\" >Tax-exemption<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Zero_Default_Risk\" >Zero Default Risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Interest\" >Interest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Long-Term_Lock-in_Period\" >Long-Term Lock-in Period:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_are_the_Disadvantages_of_Tax-Free_Bonds\" >What are the Disadvantages of Tax-Free Bonds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Low_Liquidity\" >Low Liquidity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_are_the_taxation_rules_for_tax-free_bonds\" >What are the taxation rules for tax-free bonds?<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Tax-free_Bonds_Vs_Fixed_Deposit_for_those_paying_312_percent_Income_Tax\" >Tax-free Bonds Vs Fixed Deposit for those paying 31.2 percent Income Tax<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#Tax-Free_Bonds_in_2022\" >Tax-Free Bonds in 2022<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_is_the_difference_between_Corporate_and_Governments_Bonds\" >What is the difference between Corporate and Governments Bonds?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#FAQS_For_Tax_free_Bonds\" >FAQ&#8217;S For Tax free Bonds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_happens_when_tax_free_bond_matures\" >What happens when tax free bond matures?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/what-are-tax-free-bonds\/#What_are_the_returns_on_tax_free_bonds\" >What are the returns on tax free bonds?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_are_tax-free_bonds\"><\/span><b>What are tax-free bonds?\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/goldenpi.com\/collections\/tax-free-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">Tax-free bonds<\/a> are financial securities issued by the government of India to raise funds for a particular purpose. It can be for the construction of a road or any other infrastructure. These <a href=\"https:\/\/goldenpi.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">bonds<\/a> are absolute tax exempted under Section 10 of the Income Tax Act of India, 1961. The income generated through these bonds is only exempted from tax however the invested amount cannot be under come to the tax exemption (under 80C). These bonds are also considered as low risk bonds.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_advantages_of_Tax-free_bonds\"><\/span><b>What are advantages of Tax-free bonds?\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Tax-exemption\"><\/span><b>Tax-exemption<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The interest income from tax-free bonds is completely exempt from taxes. These bonds are exempt from tax deducted at source (TDS), as well. The principal amount invested in tax-free bonds does not qualify for a tax deduction under Section 80C, so it is essential to record your interest income.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Zero_Default_Risk\"><\/span><b>Zero Default Risk<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Public sector organisations issue bonds that are exempt from taxes (if notified by CBDT circular). These tax-free bonds are generally considered low-risk, with a reduced likelihood of default, compared to other types of bonds.<\/span>Investors may feel more at ease maintaining their investment over the long term due to the assurance of receiving their principal and <a href=\"https:\/\/goldenpi.com\/blog\/fixed-deposit\/how-much-tax-is-deducted-on-fd-interest\/\">interest<\/a> payments.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Interest\"><\/span><b>Interest<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Given that the interest on these bonds is not subject to taxes, the rate of interest given on tax-free bonds typically ranges from 5.50% to 9% which is quite appealing. The interest is paid yearly to the bondholder. The rates, however, are fluctuating since they depend on the price of government securities at the time they are quoted. Investing in tax-free bonds at the present yields might earn you upto 6% return that is not subject to taxation.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Long-Term_Lock-in_Period\"><\/span><b>Long-Term Lock-in Period<\/b><span style=\"font-weight: 400;\">:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The lock-in term for tax-free bonds spans from 10 to 20 years or more, making them appropriate for investors with a lengthy investment horizon. In light of this, if you plan to invest for the long term, tax-free bonds outperform bank <a href=\"https:\/\/goldenpi.com\/blog\/fixed-deposit\/why-most-indians-have-only-fds-and-why-thats-a-problem\/\">FDs<\/a> and regular bonds in terms of tax-adjusted returns.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_Disadvantages_of_Tax-Free_Bonds\"><\/span><b>What are the Disadvantages of Tax-Free Bonds?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Low_Liquidity\"><\/span><b>Low Liquidity<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Despite being listed on stock exchanges, tax-free bonds have a low level of liquidity. Consider the situation where you invested in XYZ tax-free bonds in 2022 and need to redeem the bond due to an urgent situation. You are unable to return the bond to the issuer because it will mature in 2026.Selling it to another bond investor on the stock exchange is your only option for getting out. However, it is quite difficult to find buyers and sellers for these bonds due to their relatively low liquidity. The main drawback of tax-free bonds is hence their low liquidity.<\/span><\/p>\n<p><b>\u00a0Can use as collateral<\/b><span style=\"font-weight: 400;\">: <\/span><span style=\"font-weight: 400;\">Bonds such as <a href=\"https:\/\/goldenpiplus.com\/sovereign-gold-bond\" target=\"_blank\" rel=\"noopener noreferrer\">sovereign gold bonds<\/a> and other types of bonds may be maintained as security for debts. However, banks do not recognise tax-free bonds as loan collateral. As a result, <a href=\"https:\/\/goldenpi.com\/blog\/bond-news\/5-tax-filing-requirements-for-bond-investors\/\">investors<\/a> are unable to use them as collateral for loans,\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_taxation_rules_for_tax-free_bonds\"><\/span><b>What are the taxation rules for tax-free bonds?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you hold the bond until it matures, the interest you get from tax-free bonds is tax-free. Therefore, the notion of tax deducted at source does not exist (TDS).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, you will be required to pay taxes if you sell the bonds on the secondary market.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gains from the sale of your bond on the secondary market after a year are subject to a 10% tax.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you sell your bond after one year from the date of purchase owing to an emergency, the profits will be subject to a 10% tax.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you sell your bond before a year from the date of purchase owing to an emergency, the profits will be taxed as per your income tax slab.<\/span><\/li>\n<\/ol>\n<h5 class=\"post-title single-post-title entry-title\" style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Tax-free_Bonds_Vs_Fixed_Deposit_for_those_paying_312_percent_Income_Tax\"><\/span><a href=\"https:\/\/goldenpi.com\/blog\/bond-news\/capital-market\/tax-free-bonds-vs-fixed-deposit-for-those-paying-31-2-income-tax\/?utm_source=blog&amp;utm_medium=blog&amp;utm_tax-free\">Tax-free Bonds Vs Fixed Deposit for those paying 31.2 percent Income Tax<\/a><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p><span style=\"font-weight: 400;\">Let us take the example how a tax-free bond\u2019s interest rate falls under the tax slab.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Below 10 lakhs earning\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-4482\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--1024x712.png\" alt=\"taxation rules for Below 10 lakhs earning\" width=\"562\" height=\"391\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--1024x712.png 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--300x209.png 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--768x534.png 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--1536x1068.png 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--1170x813.png 1170w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--1920x1335.png 1920w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog--585x407.png 585w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105647\/New-Table-1-for-blog-.png 1959w\" sizes=\"(max-width: 562px) 100vw, 562px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Above 10 lakhs earning\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-4481\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-1024x726.png\" alt=\"taxation rules for Above 10 lakhs earning \" width=\"571\" height=\"405\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-1024x726.png 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-300x213.png 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-768x544.png 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-1536x1088.png 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-1170x829.png 1170w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-1920x1360.png 1920w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog-585x414.png 585w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2022\/09\/16105427\/New-Table-for-Blog.png 1928w\" sizes=\"(max-width: 571px) 100vw, 571px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax-Free_Bonds_in_2022\"><\/span><b>Tax-Free Bonds in 2022<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Indian Railway Finance Corporation\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Power Finance Corporation\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">National Highways Authority of India\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Housing and Urban Development Corporation\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rural Electrification Corporation\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">National Thermal Power Corporation\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Indian Renewable Energy Development Agency\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">National Bank for Agriculture and Rural Development\u00a0<\/span><\/li>\n<\/ul>\n<h5 class=\"post-title single-post-title entry-title\" style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_Corporate_and_Governments_Bonds\"><\/span><a href=\"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/difference-between-corporate-and-governments-bonds\/?utm_source=blog&amp;utm_medium=blog&amp;utm_tax-free\">What is the difference between Corporate and Governments Bonds?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<h2><span class=\"ez-toc-section\" id=\"FAQS_For_Tax_free_Bonds\"><\/span><strong>FAQ&#8217;S For Tax free Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_happens_when_tax_free_bond_matures\"><\/span><strong>What happens when tax free bond matures?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<style type=\"text\/css\"><!--td {border: 1px solid #cccccc;}br {mso-data-placement:same-cell;}--><\/style>\n<p><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;When tax free bonds mature, the principal amount is paid back to the investor, along with any accrued interest. The investor is then free to reinvest the money in another tax free bond, or to use it for any other purpose. While the interest payments on tax free bonds are not subject to federal income tax, they may be subject to state and local taxes.&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:9089,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:1,&quot;11&quot;:4,&quot;12&quot;:0,&quot;16&quot;:11}\">When <a href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-are-tax-free-bonds\/\" target=\"_blank\" rel=\"noopener noreferrer\">tax free bonds<\/a> mature, the principal amount is paid back to the investor, along with any accrued interest. The investor is then free to reinvest the money in another tax free bond, or to use it for any other purpose. While the interest payments on tax free bonds are not subject to federal income tax, they may be subject to state and local taxes.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_returns_on_tax_free_bonds\"><\/span><strong>What are the returns on tax free bonds?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<style type=\"text\/css\"><!--td {border: 1px solid #cccccc;}br {mso-data-placement:same-cell;}--><\/style>\n<p><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Tax-free bonds typically offer lower interest rates than taxable bonds, since the investor is not paying any taxes on the interest income The interest on tax free bonds ranges between 7.3% to 7.5% per year. The returns on these bonds will vary depending on the specific bond and the current market conditions.&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:769,&quot;3&quot;:{&quot;1&quot;:0},&quot;11&quot;:4,&quot;12&quot;:0}\"><a href=\"https:\/\/goldenpi.com\/collections\/tax-free-bonds\" target=\"_blank\" rel=\"noopener noreferrer\">Tax-free bonds<\/a> typically offer lower interest rates than taxable bonds, since the investor is not paying any taxes on the interest income. The interest on tax free bonds ranges between 7.3% to 7.5% per year. The returns on these bonds will vary depending on the specific bond and the current market conditions.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most of us might be worried about paying high taxes on our investment returns and looking for investment options which may have&hellip;<\/p>\n","protected":false},"author":4,"featured_media":12218,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[24],"tags":[],"class_list":["post-4484","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What are Tax Free Bonds India? - Interest on Tax Free Bonds<\/title>\n<meta name=\"description\" content=\"Most of us might be worried about paying high taxes on our investment returns and looking for investment options which may have tax-free. 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