About Infrastructure Bonds
What are bonds?
a bond is an instrument of debt of the bond issuer to the holders. The most common types of bonds include municipal bonds and corporate bonds. Bonds can be in mutual funds or can be in private investing where a person would give a loan to a company or the government.
What are Infrastructure bonds?
The bonds which are borrowed to invest in government-funded infrastructure in-country.
Who issues these types of bonds?
- Non- Banking Financial Companies.
- the government authorized Infrastructure companies.
Infrastructure bonds have become the talk of the town. Most of the taxpayers are happy that they have gotten one more avenue to save tax from this year onwards. Till last year, taxpayers can invest only Rs. 1 lakhs and can save Rs 30, 900 if they fall in the highest bracket of a taxpayer under Section 80 C of the Income Tax Act. From this year onwards, a person can invest an additional amount of Rs 20,000 in Infra Bonds under Section 80 CCF.
- Now people can easily invest an additional amount of Rs 20,000 in Infrastructure Bonds.
- Infrastructure companies will raise funds from 5 years and ten years under this process.
- Funds can be long-term infrastructure projects across different sectors.
Some of the companies that are the first to offer a breed of new bonds are L & T Infra, IFCI, IDFC. Life Insurance Corporation and Power Finance Corporation are expected to join this list soon. Taxpayers can invest in these bonds only once if they have exhausted Section 80 C limit of Rs 1 lakhs.
Individuals belonging to a higher income tax bracket group, across all age groups can also consider investing in these bonds. Senior citizens in the highest tax bracket can opt for an annual payout for a regular return.
If you have invested an amount of Rs 20,000, then this amount will be exempted from taxation Under Section 80 CCF, the interest earned will be added to your income and will be deducted according to the tax slab.
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