NHAI Bonds: Interest Rates, Benefits, and How to Buy in 2025

What are NHAI Bonds?

The National Highways Authority of India (NHAI) is responsible for building and maintaining India’s road infrastructure. To finance its projects, NHAI issues bonds that appeal to investors seeking stable returns and relatively low risk, given the government backing.

This guide explains what NHAI bonds are, their types, interest rates, tax benefits, and the process of buying them in India.

NHAI bonds are debt instruments issued by the National Highways Authority of India, a government-owned body under the Ministry of Road Transport and Highways. Investors who purchase these bonds lend money to NHAI in return for fixed interest payments and repayment of principal at maturity.

Because NHAI is government-backed, these bonds are generally considered safer compared to corporate bonds.

Types of NHAI Bonds

1. Capital Gain Bonds (54EC Bonds)

• Issued under Section 54EC of the Income Tax Act.

• Allow investors to claim exemption on capital gains tax if invested within six months of selling an asset.

• Have a mandatory lock-in period of five years.

2. Taxable NHAI Bonds

• Provide fixed interest but do not offer tax exemption on capital gains.

• Suitable for investors who prefer predictable returns.

3. NHAI InvIT Bonds (Infrastructure Investment Trusts)

• Investment vehicles that generate returns from infrastructure projects like toll collections.

• Listed on stock exchanges, tradable like shares, providing better liquidity.

NHAI Bonds Interest Rate 2025

The NHAI bonds interest rate generally falls between 5% and 7.5% per annum, depending on the bond type, market conditions, and tenure.

• NHAI 54EC bonds usually offer interest rates of 5–6%.

• Taxable and InvIT bonds may provide slightly higher yields.

• Interest is taxable as per the investor’s income tax slab.

How to Buy NHAI Bonds in India (Step-by-Step)

• Open a Demat and trading account to buy listed NHAI or InvIT bonds.

• Browse available NHAI bonds, checking coupon rates, maturity, and credit rating.

• Place an order online through exchanges or platforms like BondScanner.

• Hold until maturity for interest or sell in the secondary market for liquidity.

NHAI Bonds Lock-in Period

• 54EC Bonds: 5 years.

• Taxable Bonds: Typically 7–10 years.

• InvIT Bonds: No strict lock-in since they are tradable, though returns may vary.

NHAI Bonds Tax Benefits

• Capital Gains Exemption: Investors who reinvest capital gains into NHAI 54EC bonds within six months can claim exemption from long-term capital gains tax.

• Taxable Interest: Interest earned on NHAI bonds is fully taxable under the investor’s applicable income tax slab.

Advantages of NHAI Bonds

• Backed by a government-owned authority.

• Provide predictable and stable returns.

• Offer tax benefits under Section 54EC.

• Listed InvIT bonds provide liquidity.

Risks of NHAI Bonds

• Interest Rate Risk: Value may decline if market rates rise.

• Liquidity Risk: Some bonds may not be easily tradable.

• Taxable Interest: Earnings are subject to tax.

FAQs on NHAI Bonds

Q1. What are NHAI bonds?

NHAI bonds are debt instruments issued by the National Highways Authority of India to finance infrastructure development.

Q2. What is the NHAI bonds interest rate in 2025?

The interest rate ranges from 5% to 7.5% per annum, depending on the bond type.

Q3. How to buy NHAI bonds online?

You can invest via stock exchanges, banks, or digital platforms like BondScanner.

Q4. Are NHAI bonds tax-free?

Only 54EC NHAI bonds offer capital gains tax exemption. Interest income remains taxable.

Q5. What is the lock-in period of NHAI bonds?

54EC bonds have a 5-year lock-in, while InvIT bonds are tradable.

Q6. Are NHAI bonds safe?

Yes, being backed by a government-owned authority, they are considered safer than corporate bonds.

Conclusion

NHAI bonds are a reliable choice for investors seeking steady returns and exposure to India’s infrastructure growth. With options like tax-saving 54EC bonds and listed InvIT bonds, investors can choose between safety, returns, and liquidity.

At BondScanner, we provide transparent insights into bonds, including NHAI bonds, to help investors make informed decisions.

Disclaimer

This blog is intended solely for educational and informational purposes. The bonds and securities mentioned herein are illustrative examples and should not be construed as investment advice or personal recommendations. BondScanner, as a SEBI-registered Online Bond Platform Provider (OBPP), does not provide personalized investment advice through this content.

Readers are advised to independently evaluate investment options and seek professional guidance before making financial decisions. Investments in bonds and other securities are subject to market risks, including the possible loss of principal. Please read all offer documents and risk disclosures carefully before investing.