Tuesday, 28 September 2010

Infrastructure Bond for Additional Rs. 20000 exemption under section 80CCF

Financial year 2010-11 you can get additional tax exemption for Rs. 20000 under section 80CCF. Let us examine the conditions and benefit of such infrastructure bonds.

Minimum and maximum Time limit of investment

The maximum time period of infrastructure bond under section 80CCF is 10 years and the minimum lock in period is 5 years. Only after 5 years you can redeem such bonds.

Rate of interest

The rate of interest of infrastructure bond under section 80CCF is varying from 7.5% to 8% per year. You can opt for yearly payment of interest or cumulative payment at the redemption of bond. TDS (Tax Deducted at Source) will not be deducted at the time of payment of interest. But the interest is taxable.

Maximum and Minimum amount of investment

A investor should invest minimum Rs. 5000 in such bond (According to the terms of the issuing institution) and no maximum limit on such investments. Even though under section 80 CCF the investor get exemption for only Rs. 20000 for a particular financial year.

Mode of holding

The holding allows only through a demat account. This is the main disadvantages of such infrastructure bond. The investor should open a demat account to hold such bond.

The infrastructure bond is proposed to be listed in stock exchanges.

Collateral security

You can pledge the instrument in banks as collateral security for taking loan. But this is allowed only after the minimum lock in period of 5 years.

Issuing Authorities

LIC, IFCI, IDFC or any other notified NBFC can issue infrastructure bonds under section 80 CCF

Recently issued Infrastructure bond under section 80 CCF

IDFC has issued an infrastructure bond and it will be available in the market from 30th September, 2010 to 18th October, 2010. It has been listed in Bombay Stock Exchange. Face value of one bond is Rs. 5000 and a investor must take at least two bonds. All the above mentioned conditions are applicable for this bond.

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  1. [...] Infrastructure Bond for Additional Rs. 20000 exemption under section 80CCF [...]

  2. YOu can invest in any infrastructure bond to get exmption under sec 80 ccf. The Lock in period is 5 years to 10 years according to the bond. Anyway they allow you to opt to withdraw after 5 years.

  3. I have seen your website by serching it through google search for Income tax and IT exemption under 80ccf.

  4. Sir,
    I wish to invest in Infrastructure bond. Kindly advise me which of the infrastructure bonds issue is at present open for investment?

  5. I will inform you through my feature posts, when I came to know any new infracstructure bonds.

  6. IFCI infrastructure bond is closing on December 31 2010. It is a very good opportunity to claim tax exemption on additional Rs 20,000. Infra bond is better option than SIP for 5 years.

  7. Tax Free IFCI Infrastructure Bond closing on 31 december 2010. Last chance to save Taxes under section 80CCF.

  8. I want to invest in infrastructure bond. pl give contact number of person.

  9. Just ask any local agent who is handling investments etc. or approach any nearest bajaj capitals branch

  10. [...] The bonds will be opened at the market from 17th January, 2011 to 04th February, 2011 and they allow an 8% return to investors in addition to the tax exemption under section 80CCF. [...]

  11. [...] L&T Infrastructure Bond opens today, 7th February, 2011 and the issue will be closed on 07th March, 2011. The total issue [...]

  12. [...] rule. This is apart from the investment of Rs. 100000 under section 80C. If you invest Rs. 20000 in infrastructure bond you can save a tax of Rs. 2000, 4000 and 6000 (excluding education cess) as per your income tax [...]

  13. [...] in favor of, “IFCI Limited – Infra Bond” Or apply online through your Online Trading Account.Infrastructure bond issued by Industrial Finance Corporation of India (IFCI), Life Insurance Corporation (LIC), [...]

  14. Pl guide for investing money in infrastructure bond & pl give contact details

  15. Any income of infrastructure debit fund shall be exempt provided it is set up in accordance with the prescribed guidelines notefied by the central govt.