CBDT has notified New Infrastructure Bonds u/s 80CCF. An Individual or HUF can invest in these new infrastructure Bonds up to Rs.20000/- in a financial year.
Features:
This bonds will be called “Long Term Infrastructure Bond”
New section can be availed by Individual or HUF only.
Only Rs.20,000/- can be invested in a Financial year to avail deduction under section 80CCF
Rs.20,000/- limit is in addition to 1,00,000/- limit of section 80C, 80CCC, 80CCD
Tenure of the Bonds will be 10 Years.
The minimum lock in period for an investor shall be five years.
After 5 years investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue document at the time of issue.
Issuer of the Bonds is LIC, IFCI, IDFC and other NBFC classified as Infrastructure Company by RBI.
There is a limit of total amount of Bonds which can be issued by these companies.
Permanent Account Number is must to apply these bonds.
Yield of the bond – The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity, as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond
Section 80CCF of the Income-tax Act, 1961 – Deduction – In respect of subscription to long-term infrastructure bonds – Notified long-term infrastructure bond
In exercise of the powers conferred by section 80CCF of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies bonds, subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section namely :
(a) Name of the bond – The name of the bond shall be “Long-term Infrastructure Bond”.
(b) Issuer of the bond – The bond shall be issued by:-
(i) Industrial Finance Corporation of India;
(ii) Life Insurance Corporation of India;
(iii) Infrastructure Development Finance Company Limited;
(iv) A Non-Banking Finance Company classified as an Infrastructure Finance Company by the Reserve Bank of India;
(c) Limit on issuance –
The bond will be issued during financial year 2010-11;
The volume of issuance during the financial year shall be restricted to twenty-five per cent of the incremental infrastructure investments made by the issuer during the financial year 2009-10;
Investment’ for the purposes of this limit includes loans, bonds, and other forms of debt, quasi-equity, preference equity and equity.
(d) Tenure of the bond –
(i) A minimum period of ten years.
(ii) The minimum lock-in period for an investor shall be five years:
(iii) After the lock in, the investor may exit either through the secondary market or through a buyback facility, specified by the issuer
in the issue document at the time of issue;
(iv) The bond shall also be allowed as pledge or lien or hypothecation for obtaining loans from Scheduled Commercial Banks, after
the said lock-in period;
(e) Permanent Account Number (PAN) to be furnished – It shall be mandatory for the subscribers to furnish there PAN to the
issuer;
(f) Yield of the bond – The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity, as
reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month
immediately preceding the month of the issue of the bond;
(g) End-use of proceeds and reporting or monitoring mechanism –
The proceeds shall be utilizes towards infrastructure lending’ as defined by the Reserve Bank of India in the Guidelines : issued by it ;
the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certified by the Statutory Auditor of the issuer;
The issuer shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, and Ministry of Finance within three months from the end of financial year.
GOI
Schemes
Government
of India
8% Savings Bond, 2003
:
Taxable Interest @ 8% p.a. payable on
31st January each year. Maturity after
6 years.
Kisan
Vikas Patra
: Invested amount doubles in
103 months i.e. 8 Years 7 Months.
Post
Office monthly Income Scheme
: Interest
payable monthly @ 8% p.a. maturity after
6 years.
5% Bonus on maturity.
Post
Office Term Deposits
: Interest @ 7.5% p.a. payable yearly for
a deposit of 5 years.
Tax
Planning Schemes - Section 80 C
Investments
in specified instruments are eligible for
rebate from the taxable income upto an amount
Rs. 1 lac in a financial year. These specified
instruments include the Premia paid for
a Life Insurance Policy, National Savings
Certificates, Equity Lnked Tax Savings Schemes
by Mutual Funds, Pension plans by Life Insurance
Companies, Public Provident Fund, Fixed
Deposit in specifid Banks etc. Additional
amount of Rs. 20,000 allowed, over and above
the existing limit of Rs. 1 lakh on tax
savings, for investment in long-term infrastructure
bomds as notifed by the Central Government.
Public
Providend Fund
:
Tax Free interest @ 8% p.a. Lock-in-period
for 15 years with an option of partial
withdrawal after 5 years
National
Savings Certificate
:
Interest @ 8% p.a. . Maturity after
6 years
Specified
Mutual Fund Schemes
: Specified "Equity Linked
Savings Schemes (ELSS)" of Mutual
Funds having a lock-in-period of 3 years.
For performance of ELSS schemes click
here
Life
Insurance
:
(a) Life Insurance premia is
subject to Tax Benefits u/s 80-C. The
maturity amount is eligible for benefits
u/s 10 ( 10 D ) . (b) Premia paid ( upto
Rs 10,000/- p.a.) under specified Pension
Plan offered by a Life Insurance Company
is eligible for Tax rebate
Fixed
Deposits in Specified Banks
:
Fixed Deposits made in specified banks
for a period of 5 years are eligible
for rebate u/s 80C
Post
Office Senior Citizens Savings Scheme
: Interest payable quarterly
@ 9% p.a. maturity after 5 years.
Maximum Investment Rs 15.00 lacs.
Long
Term Infrastructure Bonds
:
Rs.20,000 allowed, over and above the
existing limit of Rs. 1lac u/s 80C
Please fill in your details and we will contact you within 24 hrs
