Tax Saving Bonds under Section 80 CCF : LIC Infrastructure Bonds

by khalid on 12/01/2011 · 72 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.

LIC Infrastructure Bonds plans to raise Rs 5000 crores in the last quarter of the current financial year with a greenshoe option to retain over-subscription for issuance of additional infrastructure bonds. LIC is allowed to issue infra bonds worth 25% of its last years investment. The bond issue would come in three tranches of Rs 400 crore each between January and March 2011. The bonds carry a coupon rate of 8.5 per cent for 10 years and 8.75 per cent for the 15-year series. There is a lock-in period of 5 years from the date of allotment. These LIC Infra bonds has a triple A rating.

Issue Details :-
Issue Period : January 2011 to March 2011
Rating : “AAA” by ICRA
Issue Size : Rs 5000 crore
Face Value : Rs 1000 per Bond
Subscription Amount : Minimum 5 bonds
Term : 10 years
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.

After lock in period is over, you can ask issuer (LIC) to buy back bonds Or you can trade these bonds in stock Exchange.

Other Infrastructure bonds:-

Industrial Finance Corporation of India (IFCI),
Infrastructure Development Finance Company (IDFC),
L&T Infrastructure Finance Company Limited (L&T),
India Infrastructure Finance Company Ltd (IIFCL).
Power Finance Corporation Limited (PFC)

LIC Infrastructure Bonds may not be able to issue tax-saving infrastructure bonds this fiscal due to a regulatory glitch. LIC Chairman TS Vijayan saying that so far we have not finalised any plan to launch tax-saving infrastructure bonds. I-T department authorised it earlier along with other NBFC”s. So still picture is not clear and it would be better to opt for other options available.

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{ 71 comments… read them below or add one }

Kapil Nath Sahu January 15, 2011

I would like to get agency for Infrastructure Bonds at the earliest, as we are residing in Industrial Area

K.N.Sahu, Janjgir (Chhatisgarh)

Reply

khalid January 15, 2011

Its nice that you want to take agency of these bonds, you have to contact local offices of these companies in your area for the same.

Thanks for dropping by 🙂

Reply

abdul qayyum khan January 29, 2011

lic 80ccf bonds

Reply

abhijit bhuin January 31, 2011

It is interesting. I want to know in details.

Reply

t bala viswanadham October 23, 2011

u can call me for more details to my cell no: 09247713737.
iam anfinancial advisor.
thanks

Reply

Thapaliya GK February 2, 2011

Dear Khalid ji,
Kindly inform the status of the LIC Infrastructure Bonds (Tax Saving Bonds under Section 80 CCF ). whether LIC is comming with issue in Feb and wait for it or to go for other option available in the market.
regards,
GK Thapaliya (Guj.)

Reply

khalid February 2, 2011

Hi Thapaliya,
LIC Infrastructure Bonds may not be able to issue tax-saving infrastructure bonds this fiscal due to a regulatory glitch. LIC Chairman TS Vijayan saying that so far we have not finalised any plan to launch tax-saving infrastructure bonds. I-T department authorised it earlier along with other NBFC”s. So still picture is not clear and it would be better to opt for other options available.
Thanks

Reply

Nayan J PRajapati February 5, 2011

Dear sir,

Please confirm the date when LIC infra bonds issue will open for public.

I will be very grateful.

Thanking you.

Best Regards,

Nayan J Prajapati

Reply

khalid February 6, 2011

Hi Nayan,

One of my informed reader of the blog Dinesh Mutreja has informed on 4th Feb 2011 that “Tax Saving Infra Bonds are coming next week by IIFCL & L & T” . There is no news about LIC Infra Bond yet, we will publish it immediatly as soon as it is available.
You may contact Dinesh on his mobile 9022235541.

Reply

Kedar mahapatra February 9, 2011

ploease give details of infrastrucutre bond

Reply

Narinder Kumar Chugh February 10, 2011

Please information infrastructure bond Rs.20000

Time Limited .
Returen Amt.after 5 Year.
Closing time
cell no 9872827940

Reply

Dinesh Jawrani February 10, 2011

hi khalid ji,
LIC infrastructure bond ke liye kab tak wait kiya jai ? LIC ka bond lounch na hone par march end me koi other optin hoga ?

Reply

abhijat February 14, 2011

Is maturity amount of infrastructure bond taxable?

Reply

khalid February 14, 2011

Hi Abhijat,

Yes maturity amount of infrastructure bond is taxable but no T.D.S. You have to show urself in I.T. Return.

Reply

vedprakash Prajapati February 14, 2011

Respected Sir,
i want to know that weather LIC’s tax saving Bonds are available or not at LIC and if no than weather it will issue in future…….pls help us…

Reply

khalid February 14, 2011

Hi Vedprakash,
LIC’s tax saving Bonds are yet to be launched, we will publish the details about its launching immediatly as soon as it is available.

Reply

M Chandrasekaran (Army Retired) February 15, 2011

Sir,
1. I run UTIITSL INCOME TAX PAN SERVICE CENTRE (3TN4447) in Woraiyur, Tiruchirappalli(TN).

2. I would like to sell/distribute Infrastructure Bonds where people can good std return, tax saving and capital protection. I am interested to work with guaranteed and nationalised schemes.

3. May I request you the authority of this web site to inform us:-

(a) Where can we get LIC Infrastructure Bond 2010-2011, please let us know
the place of availability in Tiruchirappalli District?

(b) How to get atleast 50 forms for my Agency and its needy customers?

(c) What are the rightful procedures to apply for in getting these forms from
the issuing authority at no cost.

(d) Inwhich web site, PDF format (Writable or non-writable) available so as to
download and issue to needy people?

2. An early reply will meet our purpose.

Thanking you, Sir.

3TN4447
UTI ITSL INCOME TAX PANCARD SERVICE CENTRE
WORAIYUR, TIRUCHIRAPPALLI-620 003

Reply

khalid February 15, 2011

Hi M Chandrasekaran,
Its nice that you are running a PAN Service Centre at Tiruchirappalli. You may get forms of Infrastructure Bonds from following places :-

Through Brokers :-
Kotak Securities Ltd. Enam Securities Private Ltd.
Sharekhan Ltd. JM Financial Services Private Ltd.
IDBI Capital Market Service Ltd. RR Equity Brokers (P) Ltd.
SMC Global Securities Ltd. Bajaj Capital Ltd.
Almondz Global Securities Ltd. HDFC Securities Ltd.
NJ India Invest Private Ltd. Integrated Securities Ltd.

Through Bankers :-
Axis Bank Ltd. HDFC Bank Ltd.
IDBI Bank Ltd. Kotak Mahindra Bank Ltd.
ICICI Bank Ltd.

Please note that LIC’s tax saving Bonds are yet to be launched, we will publish the details about its launching immediatly as soon as it is available.

Reply

AVGN Vara Prasad February 15, 2011

LIC Infrastructure Bonds issued or not. At LIC Branches I could not get correct information. Pl let me know the position.

Thanks

Vara Prasad AVGN

Reply

khalid February 15, 2011

Hi Vara Prasad AVGN,
LIC’s tax saving Bonds are yet to be launched, we will publish the details about its launching immediatly as soon as it is available.

Reply

AVGN Vara Prasad March 1, 2011

Respected Sir,

Still to wait for LIC infra bonds/are they issuing or not/ could you clarify please.

Regards,

Vara Prasad AVGN

Reply

khalid March 1, 2011

Hi Vara Prasad AVGN,

LIC Infrastructure Bonds may not be able to issue tax-saving infrastructure bonds this fiscal due to a regulatory glitch.

Reply

AVGN Vara Prasad March 5, 2011

Sir,

In that case which is available now and could you suggest me the best one to fo for. i dont have any demat account.

Thanks and Regards,

Vara Prasad. AVGN

Arun Goyal February 15, 2011

How we got Infra Tax saving bond ,I am residing at jaipur, Where application are avaialable for LIC or India Infrasture or Powe Finance Corporation bond

Reply

Garg Capital March 22, 2011

U can Contact us for the same at our office/Mobile 9829090281

Reply

Rishiraj February 15, 2011

IIFCL infrastructure bonds & L&T infrastructure bonds

SECTION 80CCF.

Tax exemption upto Rs.6000 .

ISSUE CLOSES – 6TH MARCH 2011

FOR DETAILS & SUBSCRIPTION IN PUNE CONTACT ON

9762847432

Reply

Velm urugan February 24, 2011

I like to invest Infrastructure Bond in LIC.

Please inform when the LIC Infrastructure bond is open and close date.

Awaiting reply.

Regards,
Velmurugan
9542351771

Reply

venkat February 26, 2011

please call me at 9241545354 for Infrastructure bonds processing (for bangalore only).

Reply

c. ravi shankara February 24, 2011

i am working in central silk board, a acentral government organization in bhadrachalam, khammam district, ap. where to get the application forms for lic infrastructure bonds for 2011? please answer.

Reply

VISWANADHAM March 8, 2011

SIR LIC INFRA BONDS NOT AVAILABLE FOR THIS FINYEAR, IF U WANT DETAILS FOR RUNNING BONDS PL CALL ME 9247713737.

Reply

venkat February 26, 2011

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

Reply

Arun Goyal February 26, 2011

I want to Invest in the LIC infra Bond please let me know the procedure & mail us Application form for the investment of the same

Regds
Arun Goyal

Reply

c. ravi shankara February 27, 2011

i am working in bhadrachalam, khammam district, andhra pradesh and i am interested to take application form for lic infrastructure bonds 2010-11 financial year. can any one provide me the information?

Reply

c. ravi shankara February 27, 2011

where to get the application form for lic infrastructure bonds? please inform.

Reply

T.BALA VISWANADHAM March 1, 2011

SIR TILLNOW LIC INFRA HAS NOT OPENED, TILL AT PRESENT OPENED ARE IDFC, REC, L&TINFRA AND POWERFINANCE., VISWANADHAM-9247713737.

Reply

Rishiraj February 28, 2011

invest in IDFC infrastructure bonds.
interest rate of 8.25%

L&T Infra bonds

interest rate : 8.3%

tax deduction u/s 80 CCF

For details & subscription in PUNE contact me on 9762847432 (Rishiraj)

Reply

Pradyot Kr. Chattopadhyay March 1, 2011

I want to get information about-(1) last date of issue
(2) way to invest
(3) what will be the value at the of prematurity after lock-in
period

Reply

VISWANADHAM March 8, 2011

for details pl call me 9247713737.

Reply

A.V. RAMA KRISHNA RAO March 2, 2011

I want an application to invest Rs. 20,000 in infrastructure bonds. Pl supply form and inform what are the enclosures required.
Also inform can I apply for these bonds on line for physican form. Payment through Credit/debit card.
M. No 099483 94499

Reply

venkat March 2, 2011

Dear Sir,

Can I know at which location you are based in ?

Reply

khalid March 3, 2011

Hi venkat,

I am in Kanpur and you ?

Thanks for visiting my blog.

Reply

venkat March 21, 2011

Sir,

I am processing this Infra Bonds and other tax saving instruments in Bangalore, Please refer your clients to me thanks and you can reach me at 9241545354.

Thanks for enquirying.

Reply

Harish Kumar Kandoi March 2, 2011

I want to invest 20000/- in LIC infra bonds. kindly update me alongwith an application form

Reply

khalid March 2, 2011

LIC Infrastructure may not be able to issue tax-saving infrastructure bonds this fiscal due to a regulatory glitch.

Reply

AVGN Vara Prasad March 5, 2011

Sirs/Madam

LIC Bonds issued ot not, please inform

Vara prasad. AVGN

Reply

parvinder pipat March 7, 2011

i wanna buy these bond , how and where i can get

Reply

VISWANADHAM March 8, 2011

sir,for details pl call me 9247713737.

Reply

vaibhav agrawal March 8, 2011

when will coming lic infra bond

Reply

VISWANADHAM March 11, 2011

SIR FOR THIS FIN YEAR NO LIC INFRA BONDS, FOR DETAILS PL CALL ME 9247713737,

Reply

JAYANTILAL K PATEL March 14, 2011

Dear Sir,
I want to know whether LIC INFRASTRUCTURE BOND ISSUE till open or not?
can I invest in bond ,Please reply !

Reply

t viswanadham March 17, 2011

SIR FOR THIS FIN YEAR NO LIC INFRA BONDS, FOR other infra bonds -DETAILS PL CALL ME 09247713737,

Reply

gauahar March 15, 2011

sir
please batayen 5 saal ke baad lic ke Infrastructure bonds per kya return milega. Isko hum agra me kahan se le sakte hain.

Reply

t viswanadham March 17, 2011

sir at present no lic infra bonds are not available. for more details pl call me 09247713737.

Reply

Paul Rongong March 15, 2011

Can i buy L&T infrastucture Bond through LIC.

Reply

t viswanadham March 17, 2011

sir , for more details for other bonds pl call me 9247713737.
l& t infra are closed.

Reply

venkat March 21, 2011

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

Reply

A.K.Singh March 23, 2011

EXTRA TAX SAVING 20,000 THROUGH INFRA BOND,JUST GOING TO CLOSE.TO INVEST PL.CONTACT AK SINGH ON PH.22482985 M.9311099558 FOR DOOR STEP SERVICE

Reply

tapas kumar sen March 23, 2011

please inform in detail

Reply

a h mondal March 23, 2011

please give me address from where i can buy LIC infrastruce bond in Kolkata .

Reply

Saptarshi Biswas April 16, 2011

Please advise which one is a good buy for this financial year.

Regards
Saptarshi

Reply

khalid April 16, 2011

Hi Saptarshi,
No doubt LIC Bond will be the best but still LIC is waiting for clearance from government and so you should also wait for some time.

Reply

T BALA VISWANADHAM April 19, 2011

SIR , TILLNOW NO ISSUE IS OPENED , IF ANY CLARIFICATIONS FOR ANY INVESTMENTS IN TAX SCHEMES OR OTHER THAN PL CONTACT OR CALL ME,
VISWANADHAM-9247713737.

Reply

t bala viswanadham October 23, 2011

now infra bonds are opened , u can write email or pl call to my cell 9247713737. thanks

Reply

Shiv Shankar Singh August 11, 2011

Dear Sir,
I want to know that is 80ccf qualifying bonds are available for purchse for Tax Saving Purpose.
Regards,
SSSingh.

Reply

t bala viswanadham October 23, 2011

singh garu now infra bonds are available to purchase they are closing on 2/11/2011. for more details pl call me 9247713737

Reply

B.P.Rawat September 17, 2011

dear sir!
I am a central govt.employee transfered to Hyderabad last year. i already sold out my house at Lucknow. the profit which i got through selling of my house is to be invested in purchasing infrastructure bonds just to save income tax. pl. advice through my mail id.

Reply

t bala viswanadham October 23, 2011

rawat garu, u can call me for more details about ur tax savings viswanadham-9247713737. u said me that u are sold ur house , it will impact capital gains tax. so hurry to avoid to pay tax.

Reply

venkat October 19, 2011

For Infra Bonds processing, please call me at 9241545354 (for bangalore only).

Reply

Shila Ghosh December 29, 2011

I have ICICI tax saving of Rs.10000/- dated 26.03.11. I want to get back the matured amount.i am staying at Kolkata. Please let me know the procedure

Reply

viswanadham December 29, 2011

mr ghosh garu u didnt mentioned about icici tax- is it mf or else any.
through whom u had taken. u can call me 9247713737 for more details.
thanks

Reply

manjunathhr January 30, 2012

I am looking good 80CCF bond, can u pls anyone suggest me good bond on this.

Reply

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