Tata capital ncd

For the amount invested in TATA NCDs , you will not get tax rebate. whereas for the amount invested in 'Tax saving bank FDs' , you will save save atleast 10% on your invested amount ( assuming you are in 10% tax-slab ) and FDs will give a return of around 8-10%. So, effectively , return on amount invested in FDs will be more and you will have more capital to invest elsewhere after competing your 1 lac investment limit under 80C. And you can invest the remaining capital in mutual funds, shares .

However, if you will still invest the remaining capital in Debt instruments only , then NCD is fine.

I am not sure about the interest on the NCDs. I think it will be added to your taxable income.