Section 80CCF: Infrastructure Bonds (IDFC Infrastructure Bonds 2011-12)

 IDFC INFRASTRUCTURE BONDS 2011-12

IDFC Infrastructure Bonds 2011-12 which will bring you an additional Tax Saving Benefit over and above limits prescribed under section 80C.
IDFC infrastructure bonds issue opens on 21 November 2011 and closes on 16 December 2011

Details of Bond returns

      SPECIFIC TERMS FOR EACH SERIES OF TRANCHE 1 BONDS

Terms of Tranche 1 Bonds(Click the image to view )

 

After the lock in period of five years, the bond will list on the NSE and BSE. Face value of one unit of the infrastructure bond is Rs5,000.
The maturity period is ten years for the bond with a buy back option after five years of the allotment of IDFC infrastructure bond. The lock in period of the bond is five years and after five years the investor can redeem the bond by using buy back option.

About Section 80CCF (Infrastructure Bonds)

Budget 2010 has introduced one more avenue for you to save tax Infrastructure Bonds.An investment upto a maximum of Rs. 20,000 in infrastructure bonds would be deductible from your taxable income. Thus, your taxable income would reduce by the investment you make in these infrastructure bonds, subject to an upper limit or ceiling of Rs. 20,000.

Please remember that this is over and above the Rs. 1,00,000 allowed under Section 80C.

The budget did not specify the exact bonds that qualify for investment under section 80 CCF – these would be notified by the government from time to time.

However, infrastructure bonds issued by both public sector / state owned companies as well as private sector companies would qualify for investment under this section. This is unlike the past trend – till now, only government entities were allowed to issue infrastructure bonds.

The money raised through these bonds would be primarily invested in infrastructure projects – building of roads, ports, airports, power plants, etc. These investments are of long term duration, and therefore, these bonds too are expected to have long tenures – 10 years or more.

The bonds are likely to carry an interest rate of 7.00 – 7.50%. Bonds issued by private companies are expected to offer a slightly higher interest rate of 8.00 – 8.50%.