IDFC Long-term Infrastructure Bonds – Tranche I is now open for subscription upto 16th December, 2011 and offering an annual interest rate of 9% for a period of 10 years with an option to buy back after five years. The tax payers can avail the additional Rs 20,000 deduction from their taxable income under section 80CCF of the Income Tax Act 1961 by way of investing in this long-term infrastructure bond. This additional Rs. 20,000 deduction from the total income is separate from Rs. 100, 000 deduction available U/s 80C. This bond will be listed in NSC and BSE. Resident Indian Individuals and HUFs are eligible for investing in this bond but minors and other categories of investors are not eligible. The main advantages of this bond are, you can block your money for a long period of 10 years at a higher interest rate of 9.00% plus tax benefits. As per RBI report the inflation is likely to come down by the end of December at least for a short to medium period. Once the inflation is under control, naturally the interest rates will also come down.
| Options for Subscription | I | II | ||
| Frequency of Interest Payment | Annual | Cumulative | ||
| Yield on Maturity | 9% | 9% (Compounded Annually) | ||
| Tenor | 10 years from the deemed date of allotment | 10 years from the deemed date of allotment | ||
| Buyback option | Yes | Yes | ||
| Buyback Dates | Date falling 5 years and one day from the Deemed Date of Allotment | |||
| Lock-in Period | Five years from the Deemed Date of Allotment | |||
| Maturity Date | 10 years from the Deemed Date of Allotment | |||
| Min Investment & Face Value | Rs 5000 per bond | |||
| Investment in Multiples of | Rs 5000 per bond | |||
| Tax Benefit | Avail the additional Rs 20,000 deduction under section 80CCF of the Income-tax Act (apart from the Rs one lakh deduction under section 80C) | |||
| Buyback Amount | Rs. 5,000 per Tranche 1 Bond | Rs. 7,695 per Tranche 1 Bond. | ||
| Maturity Amount | Rs. 5,000 per Tranche 1 Bond | Rs. 11,840 per Tranche 1 Bond | ||
| Nature of the Bond | Secured | |||
| Security Cover | 1.0 time the outstanding Tranche I Bonds at any point of time. | |||
| Credit Rating | Assigned "(ICRA)AAA" from ICRA and "Fitch AAA(ind)" from Fitch | |||
| Issuance & Trading | Bonds shall be issued both in dematerialized form and physical form. However, trading allowed only in dematerialized mode after the expiry of lock-in period of 5 years | |||
| | | | | |
For more information about this bond please contact your broker or contact the company representative directly. Please note that, this is not a buy recommendation
Best Regards
Prakash Nair
www.keralites.net          |
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