NHAI Tax Free Bonds

Download NHAI Tax free bonds Application Forms

In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of Section 10 of the Income Tax Act, 1961 (43 of 1961) the Central Government has authorised National Highway Authority of India to issue during the FY 2011-12, Tax Free Secured Redeemable Non-Convertible Bonds of face value of Rs. 1,000 each aggregating upto Rs 10,000 crores. 

The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of IT Act.

There will be no deduction of tax at source from the interest, which accrues to the bondholders on these bonds irrespective of the amount of the interest or the status of the investors.

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

Highlights

An autonomous body of Government of India under the Ministry of Road, Transport Highways constituted on June 15, 1989 by an act of Parliament - The National Highways Authority of India Act, 1988 and operationalized in February 1995

Conducts survey, develop, maintain and manage the National Highways, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it

Nodal agency for development of National Highway Projects under NHDP and allied programmes approved by the Government of India.

As on August 31, 2011, NHAI has awarded 141 BOT Toll based contracts valued at Rs. 1,04,984 crores, 49 BOT Annuity based contracts valued at Rs. 29,081 crores through PPP mode

                                                                                                                                                                           

Sources of funds include (i) Government support in the form of capital base, cess funds, additional budgetary support, capital grants, maintenance grant, ploughing back of toll revenue and loan from GoI, (ii) loan from multilateral agencies and (iii) market borrowings

Salient features of the proposed NHAI tax free bonds

Tax benefits u/s 10 (15) (iv) (h) of the Income Tax Act, 1961 – interest on these Bonds shall not form part of Total Income.

Credit Ratings of “CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE and “Fitch AAA(ind) with Stable Outlook” by FITCH indicating Highest Degree of Safety in terms of timely servicing of financial obligations.

Bonds can be held in physical or in dematerialized form, at the option of bondholders

Bonds are proposed to be listed on the BSE and NSE

Strengths

NHAI is nodal agency for development of NH Projects under NHDP and allied programmes approved by GoI:

The nature and charter of NHAI makes it a nodal agency for development of NH projects under NHDP and allied programmes approved by GoI. NHAI infuses and channels private players’ participation and funds into immediate areas of development bringing about a healthy participatory economy. There are no direct competitors to NHAI.

Track record of consistent operational performance and growth

NHAI has an established track record of consistent growth and performance. It completed projects of 1783 kms against award of 5059 km in FY 2010-11 as against completion of 636 kms against award of 1730 kms in 2006-07.

Pioneering initiatives in the road sector in India

NHAI has initiated several innovative processes over the years which have been different from existing industry practices and have led to improved construction and service quality in the contracts.

Strategic role in GoI initiatives and established relationships with infrastructure sector participants

NHAI derives a strategic advantage from our strong relationship with the GoI and occupy a key position in plans for the growth and development of the Indian highway sector. NHAI has been involved in the development and implementation of various programmes, policies and structural and procedural reforms for the highway sector in India.

Favorable credit rating and access to various cost-competitive sources of funds

                               NHAI receives funds through (i) Government support in the form of capital base, cess fund, additional budgetary                support, capital grant, maintenance grant, ploughing back of toll revenue and loan from GoI; (ii) loan from multilateral           agencies and (iii) market borrowing, thus dragging its average cost of capital. Further the highest credit rating of                          “AAA” by CRISIL, CARE & Fitch helps NHAI to borrow at competitive costs.

How to apply to NHAI Bonds?
You can download the forms below

Download Application Forms

Submit the filled up form to Collection canter near you