I am looking for information regarding NHAI bonds for NRIs in the US? Can the tax be paid in US and is the fund repatriable? Can the bonds be sold prior to maturity? Please advice.

Published on: Feb 03, 2012, Last updated on: Feb 03, 2012

Categories: Investment Instruments, Direct Investment, Taxation, Source: Premium Knowledge Partner

Answered by: Kotak Mahindra Bank

NHAI bonds is issued by National Highway Authority of India and is generally tax free in nature and therefore neither income tax would be required to be paid, nor will it be subject to TDS in India. However, capital gains on these bonds (if any) are taxable like normal corporate bonds. The investment in these bonds can be done either on repatriable or non-repatriable basis, based on the source of the funds. These bonds are purchased in INR and are listed on stock exchanges and can be sold any time before maturity. Otherwise, the investor can wait up to maturity when the lender would return the face value. Only bonds in demat form can be traded. The sale can be made through any broker registered with recognized stock exchanges. The interest income on these bonds can be repatriated after obtaining a certificate from a chartered accountant that the said amount is eligible for repatriation. In case the application is made on a repatriable basis, the funds can be taken to the foreign country of the NRI. We are premium knowledge partner of OIFC and the 4th largest private sector bank in India. We thank you for choosing us and have a host of banking products for NRI's to choose from.

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