SREI Infrastructure Finance Limited (SIFL) has come out with a long term infrastructure bond to take benefit of income tax rebate under section 80CCF. The bonds offered by the company are secured redeemable non-convertible debentures. The company is offering the best returns in the present market.
Issue Details :-
Issue Period : 31st December 2011 to 31st January 2012
Security : CARE AA by CARE
Issue Size : Rs 100 crore
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 1 bond
Lock-in Period : 5 years
Lead Managers: ICICI Securities Limited, Karvy Investor Services Limited, RR Investors Capital Services Private Limited and Srei Capital Markets Limited.
Registrars : Link Intime Private Limited
Listing : Proposed to be listed on BSE
There are four options to choose from for subscribers of these bonds.
|Series 1||Series 2||Series 3||Series 4|
|Face Value||Rs 1000 per Bond||Rs 1000 per Bond||Rs 1000 per Bond||Rs 1000 per Bond|
|Maturity Tenor||10 years||10 years||15 years||15 years|
|Lock-in Period||5 years||5 years||5 years||5 years|
|Interest Payment||Annual||Cumulative Annual||Annual||Cumulative|
The bonds have a face value of Rs 1,000 and will be issued in four series with an annual interest rate of 8.90 per cent for series 1 and 2 with 10-year maturity and 9.15 per cent for the rest with 15-year maturity.
Tax Benefits :- Under section 80CCF of the Income Tax Act, Rs 20,000 per annum paid or deposited as subscription to long term infrastructure bonds shall be deducted in computing the taxable income. In the event that any applicant applies for bonds exceeding Rs 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs 20,000 per annum. This is over and above Rs 1,00,000 tax benefit available under section 80C, 80CCC and 80CCD.
Benefits as per Tax slabs :-
1. Slab 10.3% : Rs 2,060
2. Slab 20.6% : Rs 4,180
3. Slab 30.9% : Rs 6,180
Pros:- The limit of Rs 20,000 per annum is in addition to Sections 80C, 80CCC and 80CCD. Hence, it is advisable to consider applying in this issue.
Cons:- The bonds are locked in for five years, so there is no exit in case you need the money midway which restricts liquidity.
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