{"id":6509,"date":"2015-09-20T09:04:06","date_gmt":"2015-09-20T03:34:06","guid":{"rendered":"http:\/\/www.apnaplan.com\/?p=6509"},"modified":"2015-09-24T09:08:30","modified_gmt":"2015-09-24T03:38:30","slug":"ntpc-tax-free-bond-2015","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/ntpc-tax-free-bond-2015\/","title":{"rendered":"7.62% NTPC Tax Free Bonds &#8211; Sep 2015 &#8211; Should You Invest?"},"content":{"rendered":"<figure id=\"attachment_6511\" aria-describedby=\"caption-attachment-6511\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-6511\" src=\"http:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-300x176.png\" alt=\"NTPC Tax Free Bonds \u2013 September 2015\" width=\"300\" height=\"176\" title=\"\" srcset=\"https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-300x176.png 300w, https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png 570w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-6511\" class=\"wp-caption-text\"><strong>NTPC Tax Free Bonds \u2013 September 2015<\/strong><\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><strong>NTPC<\/strong>, one of the Maharatna companies of Government of India is issuing its <span style=\"text-decoration: underline;\"><strong>Tax Free Bonds<\/strong><\/span>. It would offer coupon rate up to 7.62% for retail investors depending on tenure. You can choose between tenure of 10, 15 and 20 Years. The bond issue would be open for subscription for September 23 to 30, 2015. The post gives the details of the same.<\/p>\n<h2 style=\"text-align: justify;\">About NTPC:<\/h2>\n<p style=\"text-align: justify;\">NTPC (National Thermal Power Corporation Limited) is Government of India PSU and is engaged in the business of generation of electricity and allied activities. It is the largest Power generation company in India.<\/p>\n<h2 style=\"text-align: justify;\">Salient Features: NTPC Tax Free Bonds 2015<\/h2>\n<ul style=\"list-style-type: disc;\">\n<li style=\"text-align: justify;\"><strong>Offer Period: September 23 to 30, 2015<\/strong> (the offer can be pre-closed on full subscription)<\/li>\n<li style=\"text-align: justify;\"><strong>Annual Interest Rates for Retail Investors:<\/strong>\u00a07.36% for 10 Years,\u00a07.53% for 15 Years,\u00a07.62% for 20 Years<\/li>\n<li style=\"text-align: justify;\">The interest rates are 0.25% less for HNIs, QIBs and corporate subscribers.<\/li>\n<li style=\"text-align: justify;\">NRIs can invest in these bonds<\/li>\n<li style=\"text-align: justify;\"><strong>40% of issue is reserved for Retail Investors<\/strong><\/li>\n<li style=\"text-align: justify;\">Price of each bond: Rs 1,000<\/li>\n<li style=\"text-align: justify;\"><strong>Minimum Investment:<\/strong> 5 Bonds (Rs 5,000)<\/li>\n<li style=\"text-align: justify;\"><strong>Max Investment<\/strong> Limit for Retail Investor: Rs 10 Lakhs<\/li>\n<li style=\"text-align: justify;\">Can be applied <strong>only in Demat Form<\/strong><\/li>\n<li style=\"text-align: justify;\">Allotment: First Come First Serve<\/li>\n<li style=\"text-align: justify;\"><strong>Listing:<\/strong> Bonds would be listed on BSE and will entail capital gains tax on exit through secondary market<\/li>\n<li style=\"text-align: justify;\"><strong>Tax\/TDS:<\/strong> As these are tax Free Bonds so no tax is to be paid and there is no TDS on interest<\/li>\n<\/ul>\n<blockquote><p><strong>Also Read:<\/strong>\u00a0<a href=\"http:\/\/www.apnaplan.com\/ppf-2\/\">PPF &#8211; A Must Have Investment<\/a><\/p><\/blockquote>\n<h2 style=\"text-align: justify;\">NTPC Tax Free Bond \u2013 Interest Rate:<\/h2>\n<p style=\"text-align: justify;\">The NTPC Tax Free Bond offers the following interest rates. The interest would be paid every year.<\/p>\n<figure id=\"attachment_6510\" aria-describedby=\"caption-attachment-6510\" style=\"width: 757px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-6510\" src=\"http:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-Interest-Rates-1024x556.png\" alt=\"NTPC Tax Free Bonds \u2013 September 2015 - Interest Rates\" width=\"757\" height=\"411\" title=\"\" srcset=\"https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-Interest-Rates-1024x556.png 1024w, https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-Interest-Rates-300x163.png 300w, https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-Interest-Rates.png 1173w\" sizes=\"(max-width: 757px) 100vw, 757px\" \/><figcaption id=\"caption-attachment-6510\" class=\"wp-caption-text\"><strong>NTPC Tax Free Bonds \u2013 September 2015 &#8211; Interest Rates<\/strong><\/figcaption><\/figure>\n<p style=\"text-align: justify;\">The table also shows the effective interest rate for different tax slabs. <em>For e.g. To earn post tax 7.36% interest on deposit a person in 30% tax bracket should actually get pre tax return of 10.65%.<\/em><\/p>\n<h2 style=\"text-align: justify;\">How Interest Rate on Tax Free Bonds Determined?<\/h2>\n<p style=\"text-align: justify;\">As per rules, the interest rate offered on Tax-free bonds are <strong>linked to yield on Government Bonds<\/strong>. Companies with AAA rated tax free bonds can offer <strong>up to 55 basis points lower to the G-Sec yield to retail investors and 80 basis points lower for other investors<\/strong>.<\/p>\n<h2 style=\"text-align: justify;\">Who should invest?<\/h2>\n<p style=\"text-align: justify;\"><strong>Tax Free Bonds are suited for people in the tax bracket of 20% or higher who are looking for regular and safe income.<\/strong> In case you do not want regular income you should first exhaust your Rs 1.5 lakhs <a href=\"http:\/\/www.apnaplan.com\/ppf-2\/\">PPF limit<\/a> where the returns are 8.7% and tax free. Salaried employees should opt for<a href=\"http:\/\/www.apnaplan.com\/voluntary-provident-fund-a-good-retirement-option\/\"> VPF <\/a>before looking at tax free bonds. Both the above options have higher returns, tax free and partial exit options after 5\/6 years.<\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><strong>Also Read:<\/strong>\u00a0<a href=\"http:\/\/www.apnaplan.com\/max-income-tax-saving-fy2015\/\">What is the Maximum Income Tax You can Save for FY 2015-16?<\/a><\/p>\n<\/blockquote>\n<h2 style=\"text-align: justify;\">Tax Free Bonds \u2013 Secondary Market:<\/h2>\n<p style=\"text-align: justify;\">You can also buy Tax free bonds from the secondary market that are listed on stock exchanges. The table below gives the snapshot of the best tax free bonds available in secondary market. You can<strong> compare the YTM (last\u00a0column) to the\u00a0interest offered on NTPC<\/strong>.<\/p>\n<figure id=\"attachment_6514\" aria-describedby=\"caption-attachment-6514\" style=\"width: 757px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-6514\" src=\"http:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/Tax-Free-Bonds-Secondary-Market-Data-as-of-September-2015-1024x329.png\" alt=\"Tax Free Bonds - Secondary Market Data as of September 8, 2015\" width=\"757\" height=\"243\" title=\"\" srcset=\"https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/Tax-Free-Bonds-Secondary-Market-Data-as-of-September-2015-1024x329.png 1024w, https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/Tax-Free-Bonds-Secondary-Market-Data-as-of-September-2015-300x96.png 300w, https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/Tax-Free-Bonds-Secondary-Market-Data-as-of-September-2015.png 1082w\" sizes=\"(max-width: 757px) 100vw, 757px\" \/><figcaption id=\"caption-attachment-6514\" class=\"wp-caption-text\"><strong>Tax Free Bonds &#8211; Secondary Market Data as of September 8, 2015<\/strong><\/figcaption><\/figure>\n<p style=\"text-align: justify;\">The <strong>problem is liquidity of bonds.<\/strong> There are very few transactions in a day and you might not be able to buy at fair price. Also <strong>you incur brokerage in tune of 0.5% to 1% on these purchases<\/strong>.<\/p>\n<h2 style=\"text-align: justify;\">Why you should invest?<\/h2>\n<ol>\n<li style=\"text-align: justify;\"><strong>Almost \u201cNO\u201d credit risk.<\/strong> The bonds are rated \u201cAAA\u201d and the company is owned by Government of India. The bonds are secured to the full extent and have the highest credit rating (AAA).<\/li>\n<li style=\"text-align: justify;\">For retail investors, <strong>the interest offered is higher than the offers on Tax free bonds in Secondary Market.<\/strong><\/li>\n<li style=\"text-align: justify;\">Good for investors in the tax bracket of 20% or higher looking for safe and regular income for long duration.<\/li>\n<li style=\"text-align: justify;\">There are chances of further rate cut by RBI in next 3 to 6 months. If it happens there <strong>would be capital appreciation<\/strong> of around 8% to 10% in the bond price.<\/li>\n<\/ol>\n<h2 style=\"text-align: justify;\">Why you should not invest?<\/h2>\n<ol>\n<li style=\"text-align: justify;\">PPF and EPF\/VPF offer tax free interest rate of more than 8.7%. So you should first exhaust those options especially if you are not looking for regular income.<\/li>\n<li style=\"text-align: justify;\">If you are in 10% tax bucket or pay no taxes. You would be better off with banks Fixed deposits of debt mutual funds.<\/li>\n<\/ol>\n<blockquote><p><strong>Also Read:<\/strong>\u00a0<a href=\"http:\/\/www.apnaplan.com\/tax-free-salary-components\/\">11 Tax Free Components You Must have in Salary<\/a><\/p><\/blockquote>\n<h2 style=\"text-align: justify;\">How to Apply?<\/h2>\n<p style=\"text-align: justify;\">The bonds can be only be issue in demat form. So you can apply through your demat account. Go to the IPO\/NCD\/Bonds offer tab of your Demat account and fill out relevant details.<\/p>\n<p style=\"text-align: justify;\">You can <strong>also apply through internet banking through ASBA<\/strong> (Applications Supported by Blocked Amount). In this case the money is blocked in your savings bank account and is deducted only when the bonds are allotted in your name.<\/p>\n<h2 style=\"text-align: justify;\">To Conclude:<\/h2>\n<p style=\"text-align: justify;\"><strong>NTPC Tax Free Bonds 2015 suits investors who are looking for safe, regular income and are in the higher tax bracket.<\/strong> A few more PSUs are going to issue tax free bonds in coming days. The interest rate is expected to be similar. So in case you want to go for these bonds, invest early as these would be grabbed very soon and may close for subscription if it gets fully subscribed before closure date.<\/p>\n<h2 style=\"text-align: justify;\">Update on Subscription:<\/h2>\n<p style=\"text-align: justify;\">NTPC Tax Free Bonds have received very good response and\u00a0was oversubscribed by 11.04 on the opening day itself.\u00a0The retail portion was oversubscribed by 6.60 times.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>NTPC, one of the Maharatna companies of Government of India is issuing its Tax Free Bonds. It would offer coupon rate up to 7.62% for retail investors depending on tenure. You can choose between tenure of 10, 15 and 20 Years. The bond issue would be open for subscription for September 23 to 30, 2015. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[31,30,340],"tags":[213,2875,2876,2877],"uagb_featured_image_src":{"full":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",570,334,false],"thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-150x150.png",150,150,true],"medium":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015-300x176.png",300,176,true],"medium_large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",570,334,false],"large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",570,334,false],"1536x1536":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",570,334,false],"2048x2048":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",570,334,false],"yarpp-thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2015\/09\/NTPC-Tax-Free-Bonds-\u2013-September-2015.png",120,70,false]},"uagb_author_info":{"display_name":"Amit","author_link":"https:\/\/www.apnaplan.com\/author\/admin\/"},"uagb_comment_info":0,"uagb_excerpt":"NTPC, one of the Maharatna companies of Government of India is issuing its Tax Free Bonds. It would offer coupon rate up to 7.62% for retail investors depending on tenure. You can choose between tenure of 10, 15 and 20 Years. The bond issue would be open for subscription for September 23 to 30, 2015.&hellip;","_links":{"self":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/6509"}],"collection":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/comments?post=6509"}],"version-history":[{"count":0,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/6509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media\/6511"}],"wp:attachment":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media?parent=6509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/categories?post=6509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/tags?post=6509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}