Government of India introduced Long term infrastructure bonds for tax saving purpose under section 80CCF in last year i.e. 2010-11.
Any individual or HUF can subscribe to notified long-term infrastructure bonds and can claim deduction of the whole amount paid from the total taxable income. The limit of deduction under section 80CCF is Rs. 20,000.
This deduction is over and above the existing overall limit of deduction on savings upto Rs. 100,000 under section 80C, 80CCC and 80CCD of the Income Tax Act, 1961, i.e., Section 80CCF allows you to invest an additional Rs. 20,000 in infrastructure bonds, and have that reduced from your taxable income in addition to the Rs. 100,000 deduction you get from the other instruments.
Bonds issued by Industrial Finance Corporation of India, Life Insurance Corporation of India, Infrastructure Development Finance Company and other RBI classified infrastructure finance companies are eligible for deduction u/s 80CCF of the Income Tax Act, 1961.
The tenure of the Bonds shall be a minimum of ten years with a lock-in period of five years for an investor. It will be mandatory for the subscriber to furnish permanent account number to the issuer for investment in the bonds.
As the end of financial year approaches, companies start approaching market with their infrastructure bonds issues. Currently two issues are open:
Please click on the corresponding link to get more information.
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