Government has allowed National Highways Authority of India (NHAI) to issue Tax Free Infrastructure Bonds aggregating to ₹ 24000 crore and Capital Gain Tax Exemption Bonds aggregating to ₹ 4000 crore in the financial year 2015-16. Ministry of Finance, Department of Economic Affairs has conveyed their in-principle approval for issue of Tax Free Infrastructure Bonds on April 17. However, no such concurrence is required for issue of Capital Gain Tax Exemption Bonds. Tax Free Infrastructure Bonds to be issued by NHAI is likely to be having tax benefits under section 10(15) (iv) (h) of Income Tax Act 1961.

 This information was given by Minister of State for Ministry of Road Transport & Highways, Shri Pon Radhakrishnan in a written reply in the Lok Sabha today.

Tax free infrastructure bonds permitted for NHAI, providing income tax exemption under the applicable income tax provision for investors. Authorization permits the issuer to issue Tax Free Infrastructure Bonds and Capital Gain Tax Exemption Bonds in the financial year, with in principle approval from the Ministry of Finance for the tax free infrastructure bonds and tax treatment identified under the relevant income tax provision.