Tax Saving Bonds under Section 80 CCF : IFCI Infrastructure Bonds

by khalid on 25/11/2010 · 20 comments

There is a new kind of tax saving option is introduced by finance minister this financial year and that is Section 80CCF. Equity savvy investor never liked to invest in Infrastructure bond and to encourage them to take part in Indian growth story and at the same time save some income tax too. According to the proposal, individuals can invest up to Rs 20,000 in these bonds in addition to the Rs 1 lakh limit available under Sections 80C, 80CCC and 80CCD such as life insurance premium, provident fund, PPF and National Savings Certificate.

IFCI Infrastructure Finance Company Limited plans to raise Rs 100 crores with a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds. The bonds have a face value of Rs 1,000 with 10 years maturity. There is a lock-in period of 5 years from the date of allotment. Earlier, IFCI raised about Rs 100 crore, including a greenshoe option of Rs 50 crore. But unlike the other IDFC bond, which has a triple A rating and L&T , which has a AA+, IFCI bonds are unrated.

Issue Details :-
Issue Period : 16th November 2010 to 30th December 2010
Rating : “unrated” by ICRA
Issue Size : Rs 100 crore with a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds.
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 5 bonds
Lock-in Period : 5 years
Listing : NSE/BSE
Buyback Option : At the end of 5 yrs and 7 yrs from the date of allotment

The 10-year bonds are offered under four options:-
Option I, which comes with a buyback after five years, offers yield on redemption of 8% per annum.
Option III, without the buyback option, will offer 8.25%. Both will be non-cumulative .
Option II and Option IV will have cumulative payment at the end of the buyback period, or 10 years, as per the option opted by the investor.

The funds raised through this issue will be utilised towards “infrastructure lending” as defined by the RBI in the regulations issued by it from time to time, after meeting the expenditures of, and related to the issue.

The maximum amount of income not chargeable to tax in case of individuals (other than women assesses and senior citizens) and HUFs is Rs 1,60,000. In the case of women, the limit is Rs 1,90, 000 and in the case of senior citizens, it is Rs 2,40,000 for FY10.Hence those guys whose income exceeds these slabs can go for these bonds.

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. 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.

IDFC officials have recently said they will float a second batch of taxsaving infrastructure bonds by March 2011 as it aims to mop up a total Rs 3,400 crore through these longterm bonds. It has already raised Rs 436 crore from the first tranche, which closed on October 25. IDFC was followed by L&T Infrastructure Finance, which raised about 240 crore.

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{ 19 comments… read them below or add one }

lakhan singh baghel December 9, 2010

I am interested to invest in infrastructure bond under section 80ccf tax rebate

Reply

lakhan singh baghel December 9, 2010

i am Iterested in infrastructure bond under section 80 ccf incometax rebate

Reply

khalid December 9, 2010

Hi Lakhan,

If your 1 lakh limit of investment is not able to save all your income tax then it is must to invest Rs 20000 in infrastructure bond for further saving your tax.

Reply

Harikant Gupta January 13, 2011

Dear Sir/Madam,
i required the 80CCF INFRASTRUCTURE BOND
Regards,

Harikant Gupta
9313714031.

Reply

Shailender January 27, 2011

Dear Sir, Can we get this bonds if we do not have DEMAT account?

Reply

shuttle service January 14, 2011

Hi there, MY SPOUSE AND I accept you, if you come to Romania there are a cider from me: ) Cheers!

Reply

Inderjeet Bhatnagar January 27, 2011

shailender: Even if you do not have a DEMAT account, you can recieve the bonds in physical format. To recieve the bonds in physical format by following these instructions:
Do not enter any details in the “Depository Participant” section of the application blank and tick mark the “BONDS IN PHYSICAL FORMAT” box.

After that submit these documents along with the application:
Self attested copies of
PAN card
Address Proof
Cancelled cheque from your account.

In this way you will recieve a bond certificate from IDFC.

For purchase or any other query, feel free to contact:

Inderjeet Bhatnagar
Goldleaf Investments
(022) 28958733

Reply

shivarao February 14, 2011

I Want Invest in infrastructure Bond under section 80ccf kindly advise me and also in our company my colleauges need of it

Reply

venkat February 26, 2011

if any body required Infrastructure Bonds processing, please call me at 9241545354 (for
bangalore only).

Reply

sunil kumar shrivastava March 2, 2011

i want to purchase infrastructure bond. i am residing in navi mumbai so where i should contact to purchase bond of Rs 20000

Reply

khalid March 2, 2011

Hi Sunil,

You may contact Harish at +91 9920328954 or email him : harish@investologic.com

Thanks for the visit.

Reply

SUMIT March 8, 2011

Hello Friends

Can i claim the exemption in of Section 80 CCF in ( Rs 20000 ) in the P/Y 2010 – 11
or it is allowed form the P/Y ( Previous Year ) 2011-12
My mobile no. is 9990202564

Thanks

Reply

khalid March 8, 2011

Hi Sumit,

You can claim the exemption in of Section 80 CCF in ( Rs 20000 ) in FY10 – 11 and it is extended for one more year FY 11-12 in this budget announcement.

Hope it would help you, thanks for your visit here in BelltheBull

Reply

Gieish Jaju March 8, 2011

From where in Jodhpur-Rajasthan should I contact to invest in such bonds

Reply

vipul n shah March 14, 2011

I am interested in infrasrtucture bond to invest befor 31st maech.
please infor weather LIC infrastructure bonds are availble.otherwise lease advcice which bond is more safe/ advantegeous.

with Regards

vipil

Reply

krishna sangtani , June 22, 2011

dear sir,
I AM NOT RECIVED THE THE BOND . WHICH I PAID THE PAYMENT OF RS 20000/- (TWENTY THOUSAND ONLY) . ON DTD. 7/1/2011 OF FORM NO 2623704. PLEASE INFOR ME ON MY ABOVE EMAIL NO AND CONTACT NO IS 9303209610 .

Reply

khalid June 23, 2011

Dear Krishna,

Please contact directly to IFCI in following address.

Registrar
Beetal Financial & Computer Services (P) Ltd., Beetal House,3rd Floor,99 Madangir, Behind LSC

OR Email to IFCI at infrabonds@ifciltd.com

Thanks for the visit. Feel free to ask your financial quires.

khalid

Reply

N Katyayan August 12, 2011

Dear Sir

I have to see my IIFCL Bond certificate .what to do?

Reply

Amit Surpuriya January 22, 2012

FOR INVESTING IN INFRASTRUCTURE BONDS – CONTACT – AMIT SURPURIYA – 9850873688 – PUNE

KSHITIJ FINANCIAL SERVICES
Mutual Fund | Infrastructure Bond | 54Ec Capital Gain Bonds | Tax Free Bond | Company Fixed Deposit | MediClaim | Debentures

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