Tax Gains with Infra Bonds

Looking to save on taxes? If you missed the opportunity to investin the earlier tax-saving infrastructure bonds issued by companies such as IFCI and Power Finance Corporation, here is another chance to save tax up to Rs 6,180.

REC – Tax Free Bonds :::

> Issue is likely to open on 6th March 2012

> Likely Coupon for 10 years series 7.93% & for 15 years series 8.12%

> Tax benefits u/s 10 (15) (iv) (h) of the Income Tax Act, 1961

= = = Interest on these Bonds shall not form part of Total Income...

Tax-saving infrastructure bonds from L&T Infrastructure, SREI Infrastructure and IDFC have been closed for subscription. While L&T and IDFC are offered 8.7 per cent interest on their infrastructure bonds with 10-year maturity, SREI Infrastructure is offered two rates-8.9 per cent on bonds with a maturity period of 10 years and 9.15 per cent on 15-year bonds. Bonds are available with interest payments on an annual as well as a cumulative basis.


L&T bonds, which opened for sale on 10 January 2012, closed the sale on 11 February 2012. IDFC Infra Bonds opened for subscription on 11 January 2012 and closed on 25 February 2012. SREI Infrastructure bonds would be on sale till 31 January 2012.

Tax-saving infrastructure bonds are debt securities issued by infrastructure firms or infrastructure finance companies. Investments up to Rs 20,000 in these bonds are eligible for tax deduction under Section 80 CCF of the Income-tax (I-T) Act. This deduction is over the Rs 1 lakh deduction available under Section 80C of the I-T Act. These are long-term secured bonds with maturity periods of 10-15 years.

Indian residents who are not minors and Hindu undivided families can invest in these bonds. The minimum investment for L&T and SREI Infra bonds is Rs 1,000, while IDFC bonds require a minimum investment of Rs 10,000.

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