Face value of Bond is Rs. 1000: The main difference of this infrastructure bond is the face value of one bond which is Rs. 1000 only. The face value all other infrastructure bond which gets income tax exemption under section 80 CCF is Rs. 5000.
Minimum investment: The minimum required investment in L&T is 5 bonds which cost Rs. 5000.
Date of issue and closing date: The issue of L&T Infra bond opened in the market on 25th November, 2011 and the issue closes on 24th December, 2011.
Date of maturity: The time period for this long-term L&T Infrastructure bond is 10 years with five years lock in period. The company offer buyback facility at 5 years and 7 years of the allotment of the bond.
Rate of interest & Interest payment option: There are two options for the bond in consideration of interest payment, annual interest payment option and compound interest option. The rate of interest is 9% for both the option. Interest will credit in your bank account in time.
Who can invest: Resident Indian can invest in this new L&T infrastructure bond in single name or joint name ofmaximum three persons. HUF also can invest in the bond in the name HUF itself or in the name of Karta of the HUF. In case of joint application the interest will paid to first applicant only. The joint holding can be with the status of either or survivor(s).
Taxability of Infra bond: The investment of Rs. 20000 in L&T infrastructure bond exempted under section 80CCF of present income tax rule. But the interest receivable from the bond is taxable under the head “Income from other sources” at the year at which it receive.
TDS from interest: No TDS will deduct from interest, if the purchase of L&T infrastructure bond is in Demat mode. But if the purchase is in physical form TDS will deduct for the interest, only if it comes in TDS limit which is Rs. 2500 per year. If you choose annual interest payment, the limit will not reach for TDS for Rs. 20000 in the bond. But for cumulative option you can submit Form 15G or Form15H , if applicable.
Availability of loan: For the first 5 years you cannot pledge L&T infrastructure bond for a loan. But after 5 years (After lock in period) you can avail loan by pledging the infra bond.
How to apply for the bond: You can download application form from the website of L&T infra bond and the filled application form with cheque or demand draft in the name of “L&T Infra Bonds 2011B” can submit to collection centers or agents.
Ratings of bond: L&T infrastructure bond assigned to credit rating as CARE AA+ by CARE & [ICRA] AA+ by ICRA.
Collecting bankers: You can submit application forms in the following collecting banks namely, Axis Bank, City Union Bank, HDFC Bank, ICICI Bank, IDBI Bank, State Bank of India.
Listing in stock exchange: After 5 years the bond may list in Bombay Stock Exchange and can trade just like other financial instruments.
L&T Infrastructure bond and IFCI infrastructure bond are the infrastructure bonds presently available in the market. But with the face value of Rs. 1000 the L&T infrastructure bond is convenient for investors.
L&T infrastructure bond
New IFCI Infrastructure bond with 9.09% & 9.16% income
New IDFC Infrastructure Bond with 9% interest