Tax Free Bonds are Non Convertible Debentures which is generally offered by Public Limited Companies. The companies offering  Tax Free Bonds are Rural Electrification Corporation (REC), National Highway Authority of India (NHAI), India Infrastructure Finance Company Limited (IIFCL), Housing And Urban Development Corporation (HUDCO), Power Finance Corporation (PFC), Indian Railway Financing corporation (IRFC), National Hydroelectric Power Corporation (NHPC), National Thermal Power Corporation (NTPC), National Housing Bank (NHB), Airport Authority of India (AAI), Ennore Port Limited (EPL), Cochin Ship Yard Limited (CSL), Indian Renewable Energy Development Agency Limited (IRDEA).  In Tax Free Bonds the interest earned through this bonds are Tax Free under the Income Tax Act 1961. These Bonds are listed in NSE and BSE Stock Exchanges. Interest in these bonds are paid annually. Generally the time horizon for investing in such a bond is 10 yrs, 15 yrs and 20 yrs. But if a investor wants to sell this bond in between the tenure he can do so by selling the bond in the stock market provided if its listed in the stock market.

These Tax Free Bonds doesn’t have any exemptions under section 80C.

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