Long-term financial commitments are crucial. “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for,” as Robert Kiyosaki famously said.
There are many advantages to aiming for long-term profits, including reduced expense ratios, reduced short-term volatility effects, compounding advantages, etc. Long-term capital gains, however, are taxable.
This is where Section 54EC saves the day for you. This part essentially lets people invest in specific long-term bonds and save money on taxes. One type of bond that saves taxes is the National Highway Bond.
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Are NHAI Bonds a good investment?
The Indian National Highway Authority Sec 54EC bonds are the general term for bonds. The National Highways Authority of India Act, 1988, establishes the National Highways Authority of India (NHAI) as a legally recognized organization. Purchasing these bonds can help a person reduce the amount of tax they will pay on any long-term capital gains from the sale of the investment. The government of India entrusts NHAI with the development and upkeep of national highways as well as other projects.
Things To Keep In Mind:
- The interest on NHAI bonds is paid annually on April 1st, while the final interest is paid upon maturity of the bond.
- The investment in NHAI bonds starts with a minimum of ₹10,000/-, equivalent to one bond, and can go up to a maximum of ₹50,00,000/-, which is equal to 500 bonds.
- These bonds are not transferrable and non-negotiable.
- You can hold these bonds through the physical mode or through your demat account.
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What Is NHAI Bonds’ Current Interest Rate?
Union Minister for Road, Transport, and Highways Nitin Gadkari declared in February 2023 that the ministry planned to issue the National Highways Infra Trust (NHAI InvIT) bonds every 15 days, with interest rates as high as 8.50 percent.
How Do I Apply For The Bonds Under NHAI?
You can purchase these Capital Gain bonds directly from NHAI/REC or through approved brokers by going in person to their office, filling out the paperwork, and sending it in. Furthermore, purchasing these bonds online is an additional option.
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Conclusion:
These bonds are AAA-rated and subject to government regulation, making them relatively safe to invest in. Furthermore, the highway authority has a solid financial base thanks to a steadily declining debt. The government expects NHAI to collect more than ₹1.40 lakh crore in total. For those seeking a low-risk, long-term tax saving plan, it is advisable to keep a watch on NHAI.
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