A tax-free bond pays interest that is exempt from income tax. In India they were issued by government-owned companies such as NHAI, PFC, REC, IRFC and HUDCO, mostly between 2011 and 2016.
There have been no new public issues for several years, so tax-free bonds can now be bought only on BSE or NSE, from other investors. The price usually stands above face value, because the tax-free coupon is worth more than a taxable one, so the yield to a buyer today is lower than the coupon.
Only the interest is tax-free. A gain on selling the bond is taxable.
Tax-free bond: issuers on Bond Interpretation
97 outstanding bonds of this kind from 18 issuers are on Bond Interpretation. Issuers with the most:
- Indian Railway Finance Corporation Limited 14 bonds
- Rural Electrification Corporation Limited 13 bonds
- Housing & Urban Development Corporation Limited 11 bonds
- India Infrastructure Finance Company Limited 10 bonds
- National Housing Bank 8 bonds
- NTPC Limited 8 bonds
- National Highways Authority of India 7 bonds
- Power Finance Corporation Limited 7 bonds
- Indian Renewable Energy Development Agency Limited 6 bonds
- NHPC Limited 4 bonds
- National Bank for Agriculture and Rural Development 2 bonds
- Annapurna Finance Private Limited 1 bond
- Astec LifeSciences Limited 1 bond
- Emami Frank Ross Limited 1 bond
- IFCI Limited 1 bond
Data as of 5 Nov 2026 (snapshot 20261105-2032). Methodology and sources
Related
Related terms: Yield to maturity (YTM) · Current yield · 54EC bond (capital gains bond)
Before investing, look up the issuer: all its outstanding bonds, rating history and disclosure documents.
This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
