PFC Tax Free Bonds NSE: Interest Rates

Interest earned on eligible PSU tax-free bonds, such as those issued by PFC, is completely tax-exempt under Section 10(15)(iv)(h) of the Income-tax Act. Consequently, no Tax Deducted at Source applies to the regular annual interest payouts received by investors.

No, the tax exemption applies solely to the annual coupon interest payments. An investor may sell PFC tax-free bonds on the NSE or BSE above their purchase cost before maturity. The resulting capital gains remain subject to applicable capital gains taxation.

PFC tax-free bonds are listed securities that settle directly into the investor's demat account. Investors can buy or sell them on the secondary market through the National Stock Exchange or Bombay Stock Exchange via their registered exchange broker at prevailing market prices.

No, Cambridge Wealth charges no fee for initial guidance and earns no commission on direct bond purchases. Exchange purchases involve investor-paid brokerage and statutory levies, while mutual fund debt routes carry asset management company paid trail commissions from scheme expense ratios.

Non-Resident Indians can access Indian debt markets, but they must confirm regulatory eligibility and account structures before transacting. Cambridge Wealth provides specialized guidance on taxation frameworks and Double Tax Avoidance Agreements for NRI and global Indian investors.

Investors seeking debt allocation can also consider sovereign-backed RBI Floating Rate Savings Bonds, government securities, or fund-route structures. These include gilt funds, PSU and banking debt funds, corporate bond funds, and target maturity index funds and exchange-traded funds.