Tuesday, 18 January 2011

Rural Electrification Corporation Ltd (REC) issues Infrastructure bond under Section 80CCF

You are aware that you can save Rs. 20000 under section 80 CCF for getting additional tax exemption other than Rs. 100000 under section 80 C.  For this exemption you have to take infrastructure bonds from some approved institutions. There are a few infrastructure bonds of this kind are already issued and closed the issue after the specified closing date.  At present   Rural Electrification Corporation Ltd (REC), a Navaratna enterprise also comes with infrastructure bonds which can claim exemption under section 80CCF.

The issue is already opened on 12th January, 2011 and the closing date is 28th March, 2011. They are planning to collect Rs. 50 Crore by issuing One Lakh bonds of Rs. 5000 each. There are two options for these bonds. One is that you can withdraw money after 5 years (Buy Back Option) and the other option is that you can hold it till the maturity of 10 years. You can earn 8% annual interest for the first option and 8.1% annual interest for the second option. In both options the interest is payable annually through cheques Demand drafts or Direct Deposit as per your choice. There is no interest accumulation option is available. The minimum required investment is two bonds with Rs. 10000.

Even if this is an unsecured bond (no assets are backed for this bonds) the bond acquired a good credit rating by all major credit rating agencies. The credit ratings are AAA /Stable’ by CRISIL , ‘CARE AAA’ by CARE, ‘LAAA’ by ICRA and “AAA(IND) by Fitch.

The company planned to pay the first interest on 31st March, 2012 and the subsequent payments will be every 31st March till the redemption or buy back. The Bonds are expected to allot to the applicants on 31st March, 2011. The bonds will be listed in NSE and BSE.

By investing Rs. 20000 in such infrastructure bond the tax payers in top tax bracket (30%) can save a tax of Rs. 6180 (Tax Rs. 6000 and Education Cess Rs. 180). And others can save Rs. 4180 (20% tax bracket) and Rs. 2060 (10% Tax bracket). This is a good chance for tax payers to save tax at these 11th hours of the financial year.

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9 comments :

  1. SHAILENDRA PACHGHARE9 February 2011 at 23:31

    How to purchase ? Address to contact near by Amravati & Yavatmal district in Maharastra.

    ReplyDelete
  2. Please contact any mutual fund agents or any nearest branch of bajaja capital

    ReplyDelete
  3. I want to purchase a infrastructure bond from REC in chennai. where from i get. how can i get it. where is the office located.

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  4. Please fill the form and submit it any collecting Banks. Please approach any collecting banks to get the form and submit the form. Please Click here to get the list of collecting banks

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  5. hi.....i was wondering if a private limited company could buy these bonds to save on capital gain ????? please revert asap
    thank you ,regards

    ReplyDelete
  6. [...] REC, IIFCL, IDFC and L&T Infrastructure Bonds are some of the other infrastructure bonds issued this financial year with the benefit of section 80CCF [...]

    ReplyDelete
  7. ANIL KUMAR TRIPATHI10 March 2011 at 05:29

    Please advise us how i can purchase the Infra structure Bond

    ReplyDelete
  8. RURAL ELECTRIFICATION CORPORATION LIMITED IS A NAVRATANA COMPANY,I AM INTERESTED TO PURCHASE 20K INFRA BOND. THERE IS NO ADVERTISEMENT IN NEWS PAPER, WEBSITE. AT BROKER OFFICE COLLECTED APPLICATION FORM AFTER KNOWING INFRA BONDS FOR OTHERS/GOVT SECTOR. THEREAFTER , I SEARCHED ON WEBSITE WITH FULL NAME WITH INFRA BOND. THIS TIME AND FURTHER I WILL PREFER TO PURCHASE INFRA BOND FROM RECL. WITH REGARDS A.K.SHARMA

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  9. i have already applied for the bonds though shares are not alloted till date.now i want to withdraw money from the bonds since i am buying a new residental property.till when and how can i withraw the money.morever i have not filled my return yet.

    ReplyDelete