Save Tax with 80 CCF Infrastructure Bonds

Save Tax with 80 CCF Infrastructure Bonds

Up to last year under section 80C, the investors can save tax on maximum Rs.1 lakh. Means if they fall in the highest tax bracket than they can save a tax of Rs.30,000 on this 1 lakh amount.

But now the new section is added in the clause and that is Section 80CCF.

Section 80 CCF is the most popular tax saving law right now in India after section 80C and the infrastructure bonds are in hottest gossips in all the cities.

Under Section 80 CCF, you can save a tax up to Rs.20,000 by investing in the infrastructure bonds.

Under Section 80CCF, the infrastructure companies can raise money from the investors for a lock-in period of up to 10 years. Up to now, the two most popular infrastructure bonds were available in the market.

01) ICICI

02) IDBI

But now, many other companies have also entered into the market. Recently, L&T launched Infrastructure bonds in the market.

Under the new section, an investor could claim deduction up to Rs 1 lakh by investing in any of the instruments. However, somehow infrastructure bonds did not figure in the list. Realising the increasing focus on infrastructure, the finance minister introduced infrastructure under Section 80CCF in his last budget.

Right now 3 other companies have launched the infrastructure bonds.

01) IDFC

02) IFCI

03) L&T Infra

Very soon following two companies will join the list of infrastructure bonds.

01) Power Finance Corporation (PFC)

02) Life Insurance Corporation (LIC)

Right now these bonds offer lucrative interest rates – 7.5%-8.0%.

However, The interest rates offered by these bonds are linked to the 10-year government of India bond, and cannot exceed that.

How to Apply for Tax Saving Infrastructure Bonds?

Applying for these infrastructure bonds is very easy. All one needs is a PAN card. You could hold the investment in physical certificates too, in case you do not have a demat account. “In case you do have a demat account, it makes sense to hold these bonds in the demat form, as it eliminates the risk of losing paper or misplacing it.