Taxability of Interest income NHAI bond

This discussion clarifies the tax treatment of interest earned on NHAI bonds. While interest income from 'Tax Free Bonds' is generally exempt under Section 10(15) of the Income Tax Act, interest from other NHAI bonds is taxable, similar to Fixed Deposit interest. The principal amount on maturity is tax-free, but interest received is always taxable. Both types of bonds were discontinued from April 1st, 2022.