Make Investment Under Tax Free Infra Bonds, Avail Tax Benefit Even After DTC

For most of us, financial year ending is the time to plan for saving income tax. People must have started investing under tax free investment schemes to avail tax deduction of Rs 100,000 as per section 80 C of income tax act. And to save more tax, people are also considering investing under tax free infra bonds to avail additional tax deduction of Rs 20,000.

As we all know DTC is expected to come into effect by April 2012, so before investing under long tem infrastructure bonds it is good for every tax payer to understand ‘Is Deduction over infra bond will continue even after DTC?’ So here is the answer-

As per revised DTC draft, investment made under any scheme which enjoys EEE (exempt, exempt, exempt) method of taxation under income tax act would continue enjoy the same for the full duration of the financial instrument. In simple words, if one invest under infra bonds before DTC come into effect, his investment will enjoy the benefit of EEE taxation method till the time of maturity.

Benefits Of Investing Under Tax Free Long Term Infra Bonds

• Additional income tax benefit of Rs 20,000 available under section 80CCF of the Income Tax Act, 1961.

Companies Offering Infrastructure Bonds

Currently few companies are offering there infrastructure bonds such as –

Company	Issue Open Date	Issue Close Date	Tenure	Buyback Option	Interest
Srei Infra Finance	31.12.2011	31.01.2012	10 Years	Yes (5 Years)	8.90%
Srei Infra Finance	31.12.2011	31.01.2012	10 Years	Yes (5 Years)	8.90% compounded (paid at maturity)
Srei Infra Finance	31.12.2011	31.01.2012	15 Years	Yes (5 Years)	9.15%
Srei Infra Finance	31.12.2011	31.01.2012	15 Years	Yes (5 Years)	9.15% compounded (paid at maturity)
REC	19.12.2011	10.02.2012	10 Years	Yes (5 Years)	8.95% compounded (paid at maturity)
REC	19.12.2011	10.02.2012	10 Years	Yes (5 Years)	8.95%
REC	19.12.2011	10.02.2012	15 Years	Yes (7 Years)	9.15% compounded  (paid at maturity)
REC	19.12.2011	10.02.2012	15 Years	Yes (7 Years)	9.15%
IFCI Infra Series IV	30.11.2011	16.01.2012	10 Years	Yes (5 Years)	9.09% (paid at maturity)
IFCI Infra Series IV	30.11.2011	16.01.2012	10 Years	Yes (5 Years)	9.09%
IFCI Infra Series IV	30.11.2011	16.01.2012	15 Years	Yes (5 Years)	9.16% (paid at maturity)
IFCI Infra Series IV	30.11.2011	16.01.2012	15 Years	Yes (5 Years)	9.16%