Skip to main content

IDFC Infrastructure Bonds



AS PER the proposal in the Union Budget last year, investment up to . 20,000 in infrastructure bonds is eligible for tax exemption under Section 80CCF.

 

Individuals can now invest up to 20,000 in these bonds in addition to the 1 lakh limit available under Section 80C, 80CCC and Section 80CCD. Earlier this financial year, IDFC, L&T Finance came out with public issues while IFCI issued these bonds on a private placement basis. Now, IDFC has decided to offer the second tranche of these bonds to the public. In the first tranche, the company has already raised 471 crore in November 2010.

The Product:

The bonds offer two investment options. The face value of each bond is . 5,000 and one can apply for a minimum of two bonds. The bonds have a tenor of 10 years and a lock-in period of five years. At the end of five years, you can sell on the stock exchanges, or you can buy them back. While Series 1 carries an 8% coupon, payable annually, Series 2, is a cumulative option where 8% will be paid compounded annually.


   You can purchase the bonds either in the demat or physical form. The issue closes on February 4, 2011.

Who Should Apply:

The maximum amount of income not chargeable to tax in case of individuals (other than women assesses and senior citizens) and HUFs is 1,60,000. While for women assesses, it is 1,90,000 for senior citizen the non-taxable limit is 240,000. Hence, those whose income exceeds these slabs could apply.

Why You Should Apply:

This limit of . 20,000 per annum is in addition to Section 80C, 80CCC and 80CCD. In addition to this, IDFC is a premier infrastructure finance company. Hence, investors could consider applying in this issue.

Why You Shouldn't Apply:

The bonds are locked in for a period of five years, so there is no exit in case you need the money midway.

Key Features:

Credit rating agency Icra has rated the bonds under this offer as 'LAAA' with a stable outlook, indicating highest safety. It is the first company to be classified as an infrastructure finance company (IFC). IDFC has strong financials and the IFC status allows it to diversify its borrowings, access long term funds, obtain more bank financing and external commercial borrowings — all of which will help in its long-term growth ambitions.

 

Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now