Friends,
The finance minister announced a new income tax section — 80CCF — which entitles a tax payer to exemptions on money invested in infrastructure bonds.On an investment of Rs 20,000, an individual in the 30% tax bracket can save Rs 6,000 of tax and earn an annual interest of 7.85-7.95%. So, it is a double benefit.the bonds will have a minimum tenure of 10 years, and investors will be locked in for five years.
IFCI has already begun a private placement of unsecured redeemable, non-convertible long-term infrastructure bonds of up to Rs 20,000 for this financial year. The interest rate is 7.85% for buyback option and 7.95% for non-buyback option, under cumulative and non-cumulative (September 15 yearly) interest schemes. However, under the 7.85% bonds with a buyback option, the investor can redeem the bonds after the fifth year. The buyback starts from 2015 to 2019. The 5-year lock-in is compulsory to avail of the 80 CCF benefit.Those who have already exhausted their annual tax savings limit of Rs 1 lakh will be keenly looking at these bonds. The exemption for investments in infrastructure bonds is in addition to the investments of Rs 1 lakh in tax-saving instruments under Section 80C, 80CCC, 80CCD. After the lock-in period, an investor can take loans against these bonds.
Do’s
IFCI has already begun a private placement of unsecured redeemable, non-convertible long-term infrastructure bonds of up to Rs 20,000 for this financial year. The interest rate is 7.85% for buyback option and 7.95% for non-buyback option, under cumulative and non-cumulative (September 15 yearly) interest schemes. However, under the 7.85% bonds with a buyback option, the investor can redeem the bonds after the fifth year. The buyback starts from 2015 to 2019. The 5-year lock-in is compulsory to avail of the 80 CCF benefit.Those who have already exhausted their annual tax savings limit of Rs 1 lakh will be keenly looking at these bonds. The exemption for investments in infrastructure bonds is in addition to the investments of Rs 1 lakh in tax-saving instruments under Section 80C, 80CCC, 80CCD. After the lock-in period, an investor can take loans against these bonds.
Do’s
- Check if you are eligible to apply
- Sign the application wherever required
- Attach a copy of self attested PAN Card along with the application form
- In case of HUF applicant kindly put the stamp of HUF on the application form
- Ensure that you mention the PAN no. allotted under the IT Act on the application
- Check that you have mentioned correct DP Name, DP ID and Client ID on the application form
- Check there is no name mismatch with the Demat account
- In case of joint application check that the name on application form appears in the same order as it appears in Demat account
- Read all the instruction carefully and complete the application form
- Application shall be signed by Karta in case of HUF
Don’ts
- Do not apply for an amount lower than the minimum application
- Do not pay the application money in cash
- Do not submit unsigned application
