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%.

Interest on PPF account has been raised to 8.6%

Interest on PPF account has been raised to 8.6% from 8%

There is some good news for investors who invest in public provident fund scheme. The government of India has increased interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme and Public Provident Fund.

While post office savings accounts (POSA) will fetch 4 per cent interest, up from 3.5 per cent, the Monthly Income Scheme (MIS) will earn an interest of 8.2% and the Public Provident Fund (PPF) will earn an interest of 8.6%, a government release said on November 11, 2011.


The new rates will be applicable from the date of notification which will be announced soon. (update: PPF will get higher return from December 1, 2011)


The annual investment ceiling in PPF savings has been increased to Rs 1,00,000 from the present limit of Rs 70,000. Commission on PPF deposit has been abolished.


Interest on loan from PPF raised to 2 % from 1 %.

Very soon common KYC can be used for different Financial Instruments!!

In a few months, you may be able to use your know-your-customer (KYC) registration with a mutual fund  to open a bank account or purchase insurance.

 Soon, you may be able to buy mutual fund units, shares, insurance policies, bank deposits and other such financial products with a single Know Your Customer (KYC) compliance.

Sebi has decided to move to a common standard for all financial products, in a few months we can able to see one registration for investing in any of financial instrument..

Now you will received a Single Account Statement (Consolidated) for all your investment in different mutual funds schemes....

A very great and Welcome news for all mutual funds investors, the Association of Mutual Funds in India (AMFI) today said the mutual fund industry has implemented the SEBI directive to issue consolidated accounts statement (CAS) to its investors. "Commencing of the transactions from the month of October 2011..


Consolidated Account Statement (CAS) will be issued as a monthly statement to investors, if there are any transactions during the month. The consolidation of folios is on the basis of PAN Number provided by the investors. This is in compliance with the amendment to the Securities and Exchange Board of India's (Sebi) regulations with regard to issuance of monthly CAS.


The CAS will be in addition to the individual account statements that investors get from the their mutual fund houses

Tax Implications on Mutual Fund Gains

If investment is in equity that is at least 65 per cent of its assets in equities:

•  If you hold your investements for less than one year then pay short-term capital gains tax on your earnings @ 15.45%
•  If you hold onto your investments for more than one year, then the long-term capital gains from them are tax-free in your hands.

 If you are investing in a debt fund:

•   Short-term capital gains from it are added to your taxable income
•  Long-term capital gains from debt funds, on investments held for more than one year, are subject to either 10 per cent flat capital gains tax or 20 per cent capital gains tax after indexation.