IDFC has come out with a public issue of long-term infrastructure bonds in the form of secured redeemable non-convertible debentures. Investments of up to . 20,000 in these infrastructure bonds are eligible for tax exemption under section 80CCF. This is in addition to the . 1 lakh limit available under Section 80C, 80CCC and section 80CCD of the Income-Tax Act. The issue is currently open and will close for subscription on December 16.
The bonds on offer have two investment options. While series 1 carries a 9% coupon, payable annually, series 2 is a cumulative option where 9% will be paid compounded annually. The face value of each bond is . 5,000 and one can apply for a minimum of two bonds. The bonds have a lock-in period of five years. At the end of five years, you can sell the bonds on NSE. Also, there is a buyback facility available. Investors can subscribe to these bonds in either the physical form or in demat form.
An investment of . 20,000 would fetch a tax exemption of . 2,060 if your tax rate is 10.3%, . 4,120 (if your tax rate is 20.6%) and . 6,180 (if your tax rate is 30.9%).
These bonds have got the highest credit rating of AAA from both ICRA and Fitch. The investment limit of . 20,000 per annum for tax benefits in these bonds is in addition to that available under Section 80C, 80CCC and 80CCD.
You can't exit these bonds before five years because of the mandatory lock-in period.
Download Section 80CCF Tax Saving IDFC Infrastructure Bonds Application Form
https://sites.google.com/site/infrabondapplications/home/IDFC-Infrastructure-Bond-Application-Forms
Download Section 80CCF Tax Saving L&T Infrastructure Bonds Application Form
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