Tax Saving Bonds under Section 80 CCF : IIFCL Infrastructure Bonds

by khalid on 07/12/2010 · 21 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.

India Infrastructure Finance Company Ltd (IIFCL) plans to raise Rs 1,200 crores in the last quarter of the current financial year with a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds. The bond issue would come in three tranches of Rs 400 crore each between January and March 2011. The bonds carry a interest rate of 8.15 per cent for 10 years and 8.30 per cent for the 15-year series. There is a lock-in period of 5 years from the date of allotment. These IIFCL bond has a triple A rating like earlier IDFC bond, which had a triple A rating but L&T bond had AA+ rating.

Issue Details :-
Issue Period : January 2011 to March 2011
Rating : “AAA” by ICRA
Issue Size : Rs 1,200 crore
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 5 bonds
Lock-in Period : 5 years
Listing : NSE/BSE

The funds raised through these bonds 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. These infrastructure bond issues are part of the government’s effort to mobilise money to part-fund the massive $1-trillion infrastructure spend it has planned for the Twelfth Plan.

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.

These IIFCL Infra bonds are coming followig IDFC Infra bonds and L&T Infrastructure bonds.

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{ 19 comments… read them below or add one }

Dinesh Mutreja February 4, 2011

Tax Saving Infra Bonds are coming next week by IIFCL & L & T .
We had missed to Invest In IDFC they can save tax in coming bonds which are valid till feb. end. call on 9022235541

Reply

khalid February 4, 2011

Thanks Dinesh for the latest information about Infra Bonds.

Reply

venkat February 8, 2011

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

Reply

JAYANTA CHATTERJEE February 8, 2011

please mentionTHE BANK from where we can buy IIFCL LONG TERM INFRASTRUCTURE BOND.

Reply

pwbkala March 25, 2011

please send me full particulars including application form for Rs.20000/- investment to be made before 30/03/2011

Reply

Shailesh Mohan February 9, 2011

What is interest rate in IIFCL and is it good for long term investment?

Reply

Inderjeet Bhatnagar February 9, 2011

Shailesh: The IIFCL bonds have 4 series; Series I to IV,Series I & II offering interest rate of 8.15% have a maturity period of 10 years, whereas Series III & IV offering interest rate of 8.30% have a maturity period of 15 years. The bonds are rated AAA/Stable” by CRISIL. However in my opinion LT infra bonds are offering 8.30% for a period of 10 years and give you a buyback option by default. For those interested in achieving higher interest returns , LT seems to be a better bet.

For any queries feel free to contact

Inderjeet Bhatnagar
Goldleaf Investments
(022)28958733

Reply

Rishiraj February 15, 2011

IIFCL infrastructure bonds ….. SECTION 80CCF.

Tax exemption upto Rs.6000 .

ISSUE CLOSES – 6TH MARCH 2011

FOR DETAILS & SUBSCRIPTION IN PUNE CONTACT ON

9762847432

Reply

koka srinivas February 25, 2011

HOW TO APPLY THESE BONDS IN HYDERABAD.
KINDLY GIVE DETAILS

Reply

venkat February 26, 2011

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

Reply

P B RAMASWAMY February 28, 2011

i would like to purchase these bonds, please provide me the details

Reply

SANTOSH KUMAR GUPTA 9051266324 March 11, 2011

DEAR SIR,
I YOU NEED ANY SHORTS OF TAX SAVING BONDS OR NORMAL INVESTMENT BONDS THEN CAN CALL ME AT GIVEN MOBILE NO. (FOR KOLKATA ONLY)

THANKING YOU!

SANTOSH KUMAR GUPTA

Reply

SANTOSH KUMAR GUPTA 9051266324 March 11, 2011

DEAR SIR,
IF YOU NEED ANY SHORTS OF TAX SAVING BONDS OR NORMAL INVESTMENT BONDS THEN CAN CALL ME AT GIVEN MOBILE NO. (FOR KOLKATA ONLY)

THANKING YOU!

SANTOSH KUMAR GUPTA

Reply

somnath chakraborti March 13, 2011

I am interested to invest 20,000

Reply

SANTOSH KUMAR GUPTA 9051266324 March 14, 2011

Dear Sir,
I need your contact no. to talk celarly for an appointment regarding this bond and address where to meet.

Thanking you!

Santosh Kumar Gupta

Reply

R S Gupta March 22, 2011

I have missed Infrastructure bond 2011 u/s 80CCF due to non opning of DMAT Account
If any bond available for the end of 30.3.2011 u/s 80CCF

Reply

rajesh thete March 26, 2011

I have missed Infrastructure bond 2011 u/s 80CCF If any bond available for the end of 30.3.2011 u/s 80CCF

REPLY

Reply

Tushar P Mohite March 27, 2011

Appl. no : 11467855 i have still not received my hard copy neither thru mail or thru courier or post pls help me
thanks
Tushar Mohite
09324216489

Reply

KUNAL KANJILAL March 31, 2011

Mr.Tushar,

I have also invested in IIFCL bond.But I have not received any hard copy nor any mail regarding Application No(Is it the same No which was filled up ?)

Can U confirm the same Please.
Regards…Kunal

Reply

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