IDFC Long Term Infrastructure Bonds

President's Advisory Panel for Federal Tax Reform
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The primary purpose of investing in this infrastructure bond is to save tax (maximum deduction u/s 80 CCF is Rs. 20,000) and get some return at the same time. However, the overall benefit to the investor will be far better than any other investment avenue as tax saving would range from 10% to 30% besides 7.5-8% return on investment.
We recommend investors not to miss this opportunity of investing while saving tax. .
Many do the mistake of comparing infra. bonds returns with Bank FD, but they forget the tax deduction available under infra. bonds.
An individual in the highest tax bracket (i.e. 30.90%); would be saving Rs. 6,180 in tax on investment of Rs. 20,000 in the infrastructure bond and effectively gaining 37.5-38% in the first year. Are you not satisfied with such a fabulous return?
Tax benefit U/S 80 CCF
Under Section 80CCF of the Income Tax Act the amount, not exceeding Rs. 20,000 per annum, paid or deposited as subscription to long-term infrastructure bonds during the previous year relevant to the financial year beginning 1 April, 2010 shall be deducted in computing the taxable income. This is over and above the Rs. 1,00,000 tax benefit available under section 80C.
Key Highlights of the Issue
Issue Size
Rs. 3,400 crores in one or more tranches. There is no minimum issue size.
Rating
“LAAA” (ICRA) indicates stable outlook and is the highest credit quality rating assigned by ICRA
Bond Face value & issue price
Rs. 5,000 per bond.
Subscription amount
Minimum
Maximum
Rs. 10,000 or 2 bonds. The bonds can be of the same series or two bonds across different series
No Limit
Who can apply
Resident individual or HUF
Investor should provide 
PAN Number and Demat Account No
Maturity / redemption
10 years from the deemed date of allotment
Lock In period
5 years from the deemed date of allotment
Buyback
5 years + 1 day from the deemed date of allotment
Listing
NSE & BSE
Loan against Bonds
Bonds cannot be pledged or hypothecated for obtaining loans during the lock in period.
Minimum number of Bonds per application*
Two Bonds and in multiples of one Bond thereafter.
For the purpose of fulfilling the requirement of minimum subscription of two Bonds, an Applicant may choose to apply for two Bonds of the same series or two Bonds across different series. 
Terms of Payment
Full amount with the Application Form
 
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1 comments:

Top Mutual Funds said...

IDFC's long-term infrastructure bonds, appears enticing only from a tax planning perspective, as an investment upto Rs 20,000 will be eligible for an additional (over and above Rs 1,00,000 benefit limit available under section 80C, 80CCC and 80 CCD of the Income Tax Act, 1961) tax benefit.

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