National Highway Authority of India (NHAI) has entered the capital market on 28^th December, 2011 with an issue of Tax Free Secured Redeemable Non Convertible Bonds, in the nature of Debentures, for Rs.5,000 crores, with an option to retain over-subscription of up to Rs.5,000 crores.

Issue shall remain open for a minimum of 3 days with scheduled closing date at 11^th January, 2012. Considering huge and overwhelming response, in all probability, this issue may close on Friday, 30^th December, 2011. Some of the features of this issue are:-

1)     The income by way of interest on these Bonds shall not form part of total income as per provisions under section 10 (15) (iv) (h) of I.T. Act 1961;

2)     There shall be no deduction of tax at source from the interest, which accrues to the bondholders in these bonds, irrespective of the amount of the interest, or the status of the investors;

3)     As per provisions under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed Bond is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer. Under section 112 of the I.T. Act, capital gains arising on the transfer of listed Bonds shall be taxed @ 10% without indexation;

4)     Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth Tax Act, 1957.

Bonds have Two series with features as under:-

Considering the tax free income to be earned from the Bonds and in view of falling interest regime and scenario ahead, it is advised to subscribe to Bonds Series II with tenure of 15 years.