Preference shares can be source of regular income for fixed income investors in a falling interest rate environment
Non-convertible debentures are held in d-mat form and hence offer many advantages over the traditional fixed deposits.
Though finance minister has announced issuance of tax free bonds in FY 15-16, it makes sense to buy bonds from secondary market. Listed bonds are expected to offer double digit returns which should make them better investment opportunity.
Investors from 10% and 20% tax slab should subscribe to these NCD. Investors in 30% tax slab however can buy tax free bonds in secondary market.