NHAI Tax-Free Bonds

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We are pleased to present you the details of Tax-Free Bonds issued by National Highways Authority of India (NHAI). The interest earned on these bonds is fully exempt from tax and there will be no deduction of tax at source from the interest, irrespective of the amount or the investors’ status. The bonds have been rated AAA by CRISIL and CARE and carry an attractive tax-free coupon of 8.20% (10 years) and 8.30% (15 years). The pre-tax yield works out to around 12% (for corporates & individuals in the highest tax bracket). Please find the illustration below:

Pre-Tax Yield Calculation:

Particulars	10 Years	15 Years
Tax-Free Yield (%)	8.20	8.30
Pre-Tax Yield (%)
Individuals (tax @ 30.90%)	11.87	12.01
Corporates (tax @ 32.445%)	12.14	12.29

The issue opens on Dec 28, 2011 and closes on Jan 11, 2012.