A Beginner?s Guide To Infra Bonds

INFRASTRUCTURE bonds are the talk of the town. Most taxpayers are happy that they have one more avenue to save taxes from this year. Till last year, they could invest only 1 lakh and save tax of 30,900 if they were in the highest tax bracket under Section 80C of the Income Tax Act. However, from this year, investors can invest an additional Rs 20,000 in infrastructure bonds under Section 80CCF. In effect, people in the highest tax bracket (30.9%) can now save an additional 6,180 from this year.
“From 2010-11, the finance minister has created a win-win situation both for infrastructure financiers as well as investors”, says Anil Chopra, Group CEO, Bajaj Capital. “Investors can invest an additional 20,000 in infrastructure bonds under Section 80CCF, while infrastructure finance companies can raise funds for five years and 10 years through this process, which can be used to fund long-term infrastructure projects across various sectors.”