Tax-free bonds have trading options that allow bond trading through a Demat account or in physical form. Therefore, investing in these bonds is simple and highly rewarding. Remember, the subscription period for the investment is open only for a specific time. When the government issues bonds to the public, the investor can subscribe by applying online or offline. On the other hand, if an investor requests for the bond post-issuance, investment is through the trading account. Hence, it is similar to trading shares in a stock market.
Redeeming tax-free bonds is a fairly simple process, provided you have completed the tenure. However, you cannot withdraw your bond before years, but only trade it on stock exchanges with other investors. The entity that issued the bond in the first place cannot repurchase it either. Moreover, the profit you make after the sale is also taxable under Section Hence, the capital gains you get after selling the bond before one year are taxable as per your income tax slab.
To conclude, tax-free bonds offer tax-free income at low risk. You can trade these bonds in secondary markets before the maturity period. So, investors need to be aware of the tenure and interest rate if they are considering those by PSU companies. How does it work? Download link sent. Start investing now or.
Start Investing Now. Was this article helpful? Have a query? We are experiencing interlocking and mutually reinforcing crises. Some, like COVID and the resulting recession and massive unemployment, are sudden, like falling off a cliff. Others, like droughts, floods, fires, sea level rise, and severe storms and mass extinctions caused by climate change, we are experiencing slowly like the frog in the proverbial pot; or explosively, like a punch to the gut.
The infrastructure crisis undergirds the COVID and climate crises and saps our ability to be resilient. The lack of robust, well designed, operated and maintained infrastructure—including roads, bridges and tunnels, water and energy facilities, mobility and transit projects, levees and sea walls, and communications networks but also schools, hospitals, and public and private buildings—is both a threat and damage multiplier. Better infrastructure softens and manages impacts, and also can create jobs and help address structural racism and inequality.
The problem is that infrastructure has a high sticker price and we pay for it primarily through taxes and fees, but due to the COVID lockdown and resulting recession, there are even less taxes and fees available for infrastructure at the local level, creating a very un-virtuous cycle.
One important element of the bill that will provide cheaper financing for infrastructure projects around the country is the Qualified Infrastructure Bond Program "QIB". QIBs are taxable municipal bonds that provide for a direct interest subsidy payment by the federal government to the municipal issuer instead of tax-exempt interest.
This will help keep funding costs low for infrastructure projects all around the country. The federal government contributes to local infrastructure in part by making the interest income on the municipal bonds that state and local governments issue for infrastructure tax free to the investor.
By giving up the tax on the interest, the federal government reduces the cost of local infrastructure. But there is a significant disadvantage to the federal subsidy provided by making interest on municipal bonds tax-exempt: It only benefits investors who would otherwise pay tax on the interest income. This came as the life sciences company opened its new bioanalytical laboratory. View More. Embattled Keppel subsidiary Basslink enters voluntary administration 5 hours ago.
Labcorp adds 90 additional research and engineering jobs 1 day ago. Contact me about the awards. Contact Me. Thought Leadership Center. In Association with. Print Issue. Read Here. Sign Up. Awards Nov. Firm grasp of finance fundamentals key to accounting professionals. Innovative companies are invited to join the Malaysia Technology Excellence Awards View more videos. Health Care Asia Magazine.
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