IFCI Infrastructure Bonds: Tax Saving Bonds under Section 80 CCF

by Manshu on November 23, 2010

in Fixed Deposits

Also read about the REC Infrastructure bonds here or the IDFC Infrastructure Bonds Tranche 2 here.

Update: There has been a change in terms, and you can now invest in these bonds in physical form also. Here is the link to relevant IFCI page.

The issue has been extended till January 12 2011

The IFCI Infrastructure bonds are the latest infrastructure bonds to be issued with the 80CCF benefits, and are the second tranche from IFCI, which issued them earlier this year as well.

The IFCI bonds are issued with section 80CCF benefits which means that they will get you a tax benefit of reducing your taxable income over and above the Rs. 100,000 under Section 80C with a cap of Rs.20,000.

The issue has been rated “BWR AA” by “BRICKWORK RATINGS INDIA PVT LIMITED” which means that they are rated as instruments with high credit quality.

IFCI Infra Bond

IFCI Infra Bond

Here are some other details about them.

IFCI Infra Bond Options

There are 4 series that you can choose from with a combination of getting interest paid annually, cumulatively, and having a buyback or not.

Here are the details of the 4 series.

Options I

Buyback &

Non – Cumulative

II

Buyback &

Cumulative

III

Non Buyback &

Non – Cumulative

IV

Non – Buyback &

Cumulative

Face Value Rs. 5,000 Rs. 5,000 Rs. 5,000 Rs. 5,000
Buy Back Option Yes Yes No No
Coupon 8.00% per annum 8.00% compounded annually 8.25% 8.25% to be compounded annually
Redemption Amount Rs. 5.000 Rs. 10,795 Rs. 5,000 Rs. 11,047
Buyback allowed after 5 years 5 years NA NA

As you probably noticed IFCI didn’t show yields in the same manner as L&T and IDFC, where they took the tax benefits based on various slabs and showed yields at different tax slabs and interest payments. This is probably a good idea given the various limitations of the way those yields were calculated.

How does the IFCI infrastructure bond buyback option work?

At the time of selecting a series you have to select either series 1 or series 2, which allow the buyback after 5 years lock in period. To exercise the buyback you have to write to IFCI to request it, and this has to be done in the month of November for the year when you want to exercise the buyback.

Open and Close Date of the IFCI Infra Bond

Opening date of the issue: November 16th, 2010 and Closing date of the Issue: December 31st ,2010. They can close earlier as well if their entire demand is met.

Is a Demat account necessary to apply for the IFCI Infra Bond?

Yes, right now it is necessary to have a demat account to apply for these bonds as they won’t be issued in physical format. Even the IDFC bonds started out as Demat only, and were later on changed to allow physical forms also. The target sum to be raised by IFCI bonds are much lesser than the IDFC ones, so they might not feel the need to change and include the physical format as well.

Will tax be deducted at source from the interest payment?

These IFCI 80CCF bonds will not attract TDS, however the interest itself is taxable at your hands. So, the bonds don’t attract TDS, but it doesn’t mean they are tax free.

Will the bonds list in a stock exchange?

Yes, IFCI plans to list these bonds on the Bombay Stock Exchange (BSE), but from reading the information memorandum it seems to me that you can only sell these bonds after the lock in period of 5 years.

Can NRIs invest in the IFCI Infrastructure bonds?

NRI customers are not eligible to apply for the issue.

What if you have already bought another infrastructure bond?

If you have already bought another infrastructure bond, and exhausted the limit of Rs. 20,000 then you won’t get any further tax benefit by buying this bond. There are also several banks that offer 8% interest for terms less than 5 years, so you won’t get much value out of locking your money in this instrument for 5 years.

How can you buy the IFCI infrastructure bonds?

You can buy these bonds through your broker like ICICI Direct, or can submit an application form in one of the bank branches that are accepting them. The information memorandum lists down a large number of HDFC bank branches so you can go to one near your house, and they might be selling the bonds or can at least tell you where you will get them.

Should you wait for another issue?

This issue is 50 basis points, or half a percentage higher than similar L&T bonds issued earlier, and reader Amit Khandelia actually left a comment about LIC coming up with a future issue, and possibly even offering term insurance free with their offer.

IDFC has also indicated interest in coming up with a future issue, so they might come up with another issue too.

The advantage with waiting is that you may get a slightly higher interest rate, maybe half a percentage or one percentage more, but as I said earlier if you’re able to wait and get a bond which offers a percentage higher, and you invest the maximum Rs. 20,000 in it – that means an additional 200 bucks extra in a year; what is that worth to you? How many hours of Googling and speculating is it really worth?

The advantage of getting it now is that you can get this one thing done with, and have plenty of time to receive the certificates for tax proofs or whatever else you need.

This is a personal decision really, but something worth keeping in mind the next time you speculate on whether you should wait or go ahead with it.

Please leave a comment if you have any questions or observations.

{ 95 comments… read them below or add one }

Sandesh Goel November 26, 2010 at 3:41 am

you mentioned that these bonds will be listed on BSE, but can only be sold after 5 years. then, what’s the point of listing these?

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Manshu November 26, 2010 at 6:31 am

If you can sell it on the exchange then you don’t have to wait for November to exercise your buyback, and if the bond price is higher than the exercise price then you’ll benefit. If not, then you can just wait to exercise the buyback.

So, the benefit of listing becomes shows up when you compare it with what would have happened had these bonds not listed at all.

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Mayank December 29, 2010 at 2:21 am

Are Buyback price fixed (inline with interset amount) or decided by them after lockin period?
Can the bond be sold BSE after lockin period, even if we have purchased it in physical form?

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Manshu December 29, 2010 at 9:38 pm

Yes Mayank, buyback prices are fixed, and that’s how they tell you indicative yields.

I don’t think you’ll be able to sell them on BSE if they are not dematerialized, but I’m not sure about it.

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vc November 26, 2010 at 8:30 am

Hi,
How is IFCI bond, as comparison to bonds issued by IDFC and L&T. I am talking comparison in perspective of rating, company overall, its future plans and projects.

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Manshu November 26, 2010 at 12:34 pm

I don’t know how to compare one with the other, but those issues were rated well by the credit agencies, and so is this one.

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hari babu k November 26, 2010 at 10:18 am

I have been invested Rs 20000 in your IDFC infra bonds in november 2010. But our company is not accepting 80ccf cliams/deductions. please stop all this type of cheating by IDFC

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Manshu November 26, 2010 at 12:32 pm

What exactly did your company say? This is a legitimate tax deduction that they should be able to get you when the tax return is filed.

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hari babu k November 26, 2010 at 10:20 am

our company is S C C L

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Karan December 17, 2010 at 12:32 am

Ask your company account to get his funda right. These bonds are tax exempt as per the Income Tax act. You company CA should clarify to the accounts department.

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K Santosh November 26, 2010 at 9:08 pm

IFCI Tax Saving Long Term Infrastructure Bonds– SERIES II Save Tax u/s 80CCF — Pune
For More Details and visit on http://www.lifins.in or call on 9822403407 – Lifins Financial, Pune, Maharashtra, India.

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abhijit December 3, 2010 at 7:46 am

can i purchase the IFCI infrastructure bond II on my wife’s dmat account?

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Manshu December 3, 2010 at 10:32 am

I think you’re interested in knowing if you can get a tax exemption, even if the bonds are bought in your wife’s name…is that correct?

I don’t think that’s possible though.

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Sriram December 5, 2010 at 5:22 am

I applied 4 bonds in IFCI TAX EXEMPTION LONG TERM INFRASTRUCTRE BOND – SERIES I on Aug 2010. I am yet to receive bond certificates from IFCI. I applied through ICICI direct. They are saying IFCI will be sending to me for last 2 months. I don’t know when i will receive it. I have send an email to IFCI no response. I need bond certificate for payment of money and tax exemption claim. Please anybody guide on this aspect.

Regards

Sriram

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GR January 3, 2011 at 11:03 pm

Did you apply for physical bonds or for Demat? If it is for Demat, you won’t receive the physical certificates. You should receive the allotment advice though.

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Imran December 5, 2010 at 6:55 am

@ Sriram – You should have got the bond certificate by now. Guess you can take a print of your demat statement from ICICI direct and use it for claim till you get the certificate. I’ll check if I can find the point of contact for IFCI bonds and pass on the info as soon as I get it.

If you wish to invest in these bonds please let me or feel free to connect with me.

-Imran
99200-67880

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B H Rao December 8, 2010 at 1:41 am

Good information.

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B H Rao December 8, 2010 at 1:58 am

My tax liability is 12,000/-. If I purchase 15,000 bonds, will it make my tax liability to nil? Or whether I have to purchase 20,000 bonds?

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Manshu December 8, 2010 at 8:48 am

No Mr. Rao, that’s not how it works. The way this works is that the bond amount will be deducted from your taxable income only, and not your tax paid. So if you are in the 20% slab, and buy bonds worth Rs. 20,000 then that Rs. 20,000 will be deducted from your taxable income, which was going to be taxed at 20%, so you will save Rs. 4,000 if you buy bonds worth Rs. 20,000 if you are in the 20% slab.

If you have not done any other investments under the 80C limit then you can try exploring options like PPF also.

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P NEMU December 9, 2010 at 10:20 am

It is understood that for investing in your current infracture bonds, one needs to have a demat a/c. Further, I presume that the bonds will figure in the demat statement, along with shares of different companies, issued periodically by the demat agency. Now, under the buyback option, does one have to approach a share broker to dispose – off the bonds at the end of 5 yrs? If so, does’nt it involve payment of brokarage charges?

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Manshu December 9, 2010 at 1:53 pm

From reading through your comment it appears to me that you are mistaking this for the official IFCI website, so let me point out that this is not the IFCI website, but a blog not affiliated to them.

To your question – you don’t need to approach a share broker to exercise the buyback option – you can write to the company, and they will execute the transaction.

Here is the relevant text from the article:

At the time of selecting a series you have to select either series 1 or series 2, which allow the buyback after 5 years lock in period. To exercise the buyback you have to write to IFCI to request it, and this has to be done in the month of November for the year when you want to exercise the buyback.

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Deepika December 10, 2010 at 3:56 am

In case of non buy back and cumulative option, whether tax on interest has to be paid on yearly basis or after the expiry of ten years

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Manshu December 10, 2010 at 3:59 am

Since you won’t get any interest on an annual basis, you won’t have to pay tax on it annually Deepika. At the end of the tenure you will have to pay capital gains taxes, but I’m not entirely certain about how this will work, and what the rates will be.

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Deepika December 10, 2010 at 4:23 am

So this means that amount would be taxable as long term capital gain, so accordingly we will get the benefit of indexation as well?

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Manshu December 10, 2010 at 5:17 am

That’s my understanding, but I’m no tax expert, and since I didn’t find anything about this specifically I am not sure about it.

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harinee December 10, 2010 at 10:52 am

I looked at icicidirect and the IFCI bonds all have maturity date as 31-jAN -2021 but you have mentioned Series 1 and Series 2 have a buyback option of 5 years. Whats the difference. Also if I opt for cumulative option Series 2 do I have to wait 10 years to get my maturity amount.
How does this work? Quite confusing

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Manshu December 10, 2010 at 11:10 am

Series 1 & 2 have a slightly lower rate of interest, and that’s because they give you an option to sell your bonds back at the end of 5 years.

This is just an option, so if you don’t exercise it, your bonds will mature in ten years as you mention in your comment. In lieu of a lower interest rate you get an option to get your money back faster.

You will have this option if you opt for Series 2 also; the only difference is that you will not be paid interest annually, and of course your maturity amount will depend on how many years have lapsed.

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A C S Kumar December 11, 2010 at 8:18 am

1)What is the maturity amount I would get on an investment of Rs.5,000 with cumulative and buy-back option after 5 years?
2)How to get the Application form for this scheme?

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A C S Kumar December 11, 2010 at 8:23 am

Pl clarify the following points:
What is the maturity amount I would get on an investment of Rs.5,000 with cumulative and buy-back option after 5 years?
How to get the Application form for this scheme?

A C S Kumar

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Manshu December 11, 2010 at 5:28 pm

Rs. 7,347 in case of buyback at the end of 5 years.

If you use a broker like ICICI Direct then you can apply through them. Else go to the bottom of this page and you will be able to see links of application forms, and other details:

http://www.ifciltd.com/IFCIBonds/InfrastructureBonds/CurrentIssue/tabid/218/Default.aspx

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VeeTee January 4, 2011 at 10:45 am

But it is mentioned redemption amount as Rs.10795 after 5 years as against your figure of Rs.7347 . Which is correct and how ?

Pls clarify

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Manshu January 4, 2011 at 1:08 pm

10,795 is the redemption amount, and the redemption will happen at the end of 10 years.

After 5 years, they allow a buy back, and if you exercise the buyback after 5 years then you’ll get 7,347, so that’s the difference VeeTee.

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kanchana December 13, 2010 at 8:16 am

I have a demat account in SBI which I am using for online share transactions.Can I use the same for infrastructure or shuld I create a new account in HDFC .What will be the am ount to start demat account

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Manshu December 13, 2010 at 8:35 am

Yes you can use the same demat account, in fact you shouldn’t spend more money on adding another demat account for anything now. Just one will do for these or any other bonds that come out in the future.

Here is a post about Demat account basics in case you’re interested:

http://www.onemint.com/2010/12/03/what-is-a-demat-account-and-how-can-you-open-one/

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SVK December 17, 2010 at 12:56 am

Does anyone know if the earlier bonds from L&T and IDFC were sucured? IFCI bonds state that “Unsecured” Bonds.
Even the rating AA- (Investible) is provided by new organisation BRIC work Rating India. Is this a new Rating orgn? Why havent they done by reputed organisations like ICRA / Crisil or any other famous organisations.

Please suggest.

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Manshu December 17, 2010 at 10:25 pm

The earlier bonds were also unsecured, and is quite likely that future issues of these type of infrastructure bonds be unsecured as well.

As for the second part of your question – I don’t know the answer to that.

There will be more issues in the future, so you can wait for them if you’re not comfortable with this one.

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Nupur December 17, 2010 at 1:56 am

Suppose I invest on IFCI Tax Saving Long Term Infrastructure Bonds– SERIES II Save Tax u/s 80CCF now, how much time will it require to get the bond to submit to my organisation for tax proof purpose. Or Is there any other way to submit.

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Manshu December 17, 2010 at 10:26 pm

I’ve seen that it’s taking about a month or so – the other option is to just buy it in physical form, and use the receipt for tax proof, which you will get immediately. Check with your company accountant if they are going to allow this or not first though.

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nisha December 20, 2010 at 5:21 am

IFCI infrastructure bond is closing on december 31 2010. It is a very good opportunity to claim tax exemption on additional Rs 20,000. Infra bond is better option than SIP for 5 years.

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Srikanth Matrubai January 7, 2011 at 3:16 am

Hmmm. very very interesting…
Can you be more elaborate Mrs.Nisha???

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Manshu January 12, 2011 at 12:49 am

She was just leaving the same comment on every post, and eventually I had to ban her and mark her as spam.

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SV December 20, 2010 at 11:48 pm

Do we have any Infrastructure bond having only 3 year lockin period and can the same be purchased without a demat account…

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Manshu December 20, 2010 at 11:50 pm

No, SV, the bonds that have come in so far have had 5 year lock in as the lowest – IFCI & IDFC.

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mrk December 22, 2010 at 11:40 pm

reading your blog …very informative for beginners like me
Just wanted to clarify . do i have to purchase such bonds evry year to claim 20k exemption .. is this startegy justified bcoz money gets locked in for such a period .
also the 4 series for the above bonds are little confusing ..which one to chose is difficult .. i think for starters and my understanding from the blog i will go for buyback non cumulative as i can sell them aftr 5 years .
i can use different startegy next year

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Manshu December 28, 2010 at 10:48 am

Yes, every year, assuming that they’re allowed next year as well.

Personally, I like the option of getting some interest paid every year, and having a buyback option even if that means a slightly lower interest (because the amount itself is small) but then that is a personal preference, and you can opt for what suits you the most mrk.

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mrk December 29, 2010 at 12:39 am

hey thanks for replying ..
i will surely keep that in mind

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Amit Srivastava December 24, 2010 at 1:14 am

Just happened to surf up to your site. The information is cogent, well researched and useful. Really wasn’t looking for assistance on the subject but this blog is doing a great service to us whee the tax laws are complicated and understanding very poor.
Do keep up the good work
Amit

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Manshu December 28, 2010 at 8:00 am

Thanks for your kind words Amit – your thoughts are much appreciated.

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Gaurav December 28, 2010 at 3:45 am

Hi,

I am planning to invest in IFCI part-2 series Infra bonds up to 20K but my demat account does not allow me to buy bonds online. I have no option but to buy in physical form.

Could you please advice if there is additional tax burden incase we buy in physical form as the correngidum states that TDS will be applicable on interest accured more than INR 2500 in a financial year.

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Manshu December 28, 2010 at 8:37 am

Gaurav – there is no “additional” tax as there is a tax on the demat form as well, but that will not be TDS, just added to income which will be taxed later on. In this case it looks like it will be TDS, though I’m not very sure about this point, as there have been some changes on this point as most issues came with only demat form first, and then opened a physical option as well.

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deewakar December 29, 2010 at 9:54 am

I have invested in IFCI LT infra bonds but yet to receive any communication from IFCI regd the same.

Any idea whom should i contact to get the proof for tax benefits purpose?

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Manshu December 29, 2010 at 9:52 pm

This link has got some contact details towards the end of the page which you could try out.
http://www.ifciltd.com/IFCIBonds/InfrastructureBonds/CurrentIssue/tabid/218/Default.aspx

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Warrier December 29, 2010 at 8:13 pm

I have been told that it may not be prudent to invest in IFCI bond since its not rated by reputed rating agencies. Is there any risk of not getting even the guaranteed int rate of 8-8.25% since its an unsecured bond? What are the drawbacks/risks that are assoiciated with an unsecured, underrated bond. Please clarify.

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Manshu December 29, 2010 at 9:55 pm

Warrier – none of the other infra bonds were secured also, and I don’t think the infra bonds to be issued in the future will be secured either. In case of bankruptcy – shareholders get wiped out first, and then the unsecured debtors, so if it comes to the bankruptcy of IFCI then you can expect some problems in not only getting the interest but your principal as well. How likely that is – I have no idea.

As for the credit rating – the rating itself is good, but the agency Brickwork doesn’t have the kind of name that CRISIL has got.

IF you don’t feel comfortable investing in this then know that there will be more issues in the future that you can wait for, and buy the infra bonds from someone else.

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pravin December 30, 2010 at 5:14 am

Hi, If i take the IFCI bond from icicidirect 1. Can i get Bond in physical format? 2. For income tax proof submission what i need to submit? 3. Do i get any details or receipt from online application? 4. Which is the best option out of 4 options? I don’t want to keep my bond block more than minimum time period. Thanks in advance….

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Manshu December 30, 2010 at 5:27 am

1. No.
2. They will send an allotment advice.
3. No, I haven’t heard of them giving out anything when you subscribe to it.
4. If you need to select the one with the buyback option, and see if you want to get paid interest every year or would rather have a lump – sum at the end. Keep inflation in mind which is a very real threat, and chips away on your money every year.

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SANJIB AGARWALLA December 31, 2010 at 12:14 am

Dear sir
I invest Rs.20000/- in IFCI-Infrastructure bond on 31.12.10 for non buyback condition for 10years.
what is the maturity amount i will get at the end of maturity.

Regards
Sanjib Agarwalla

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Manshu January 1, 2011 at 2:48 am

11,047 at the end of 10 years Sanjib.

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SANJIB AGARWALLA January 5, 2011 at 3:18 am

wrong calculation ,i invest rs 20000.00 and i get only 11047 at the end of 10 years.Please correct and send

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Manshu January 5, 2011 at 3:54 am

The amount I wrote down was for one bond of Rs. 5,000 which is what is shown in the post also, which you somehow failed to see.

How about doing a little due diligence before saying the calculation is wrong?

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Anurag January 4, 2011 at 8:06 am

Hi

I have invested 20,000 in IFCI infrastructure bonds. I have not got the hard copy or allotment advice from IFCI yet. I need to show the hard copy of allotment as proof to get tax exemption. When would i get the hard copy of allotment. Does anybody else has got the hardcopy of bond allotment till now.
Also what is meant by allotment advice

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PK Goyal January 5, 2011 at 1:01 am

Is the Tax Saving Infrastructure Bond option still alive or closed. I have not invested so far and need to invest Rs 20,000/- before 10th of this month.
Pl confirm.

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Manshu January 5, 2011 at 4:38 am

It’s still available as the date has been extended till 12th January.

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ReceiptNeeded January 5, 2011 at 2:15 am

I too put money thru icici direct 2 days back. When will I get receipt of the same? My office wil not accept icici direct printout. they need ifci receipt only.

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Amit Grover January 5, 2011 at 4:54 pm

I have invested 20,000 in IFCI infrastructure bonds trough karvy . I have not got the hard copy or allotment advice from IFCI yet. I need to show the hard copy of allotment as proof to get tax exemption. When would i get the hard copy of allotment. Does anybody else has got the hardcopy of bond allotment till now.
Also what is meant by allotment advice

can we show bank statement paid to IFCI infrastructure to get the proof for tax benefits purpose

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kulshrshth January 5, 2011 at 9:35 pm

can i get the hard copy of recipt from icfi if i purchase bond from icici direct for showing proof to get the tax assumption.

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amitgrover January 7, 2011 at 2:45 pm

can i get the hard copy of recipt from icfi if i purchase bond from icici direct for showing proof to get the tax assumption

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Manshu January 7, 2011 at 11:56 pm

They take time to send you that, so you must be prepared to wait and have some good buffer on your last date to submit tax proofs.

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Amarjit January 8, 2011 at 8:48 am

Dear Manshu ,

I do not have any demat acoount but my wife has it. She is a housewife and as per office record she is dependent family member. I live in a small city in Punjab where I could not find any agent or institution through which I can purchase Infrastructure bonds in physical form.
Kindly advise:
1) will purchase of bonds in my spouse name thro’ her DP qualify for my tax deduction?
2) In case of guys like me living in cities with less resources , how to purchase physical form of bonds as u mentioned that intercity cheques are not valid?
Request your help. Thanks

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Manshu January 9, 2011 at 7:14 am

I have not seen any evidence that suggests that buying in wife’s name will get you the tax benefit. If anyone else has read something that suggests this is possible then please leave a comment here.

For purchasing the bonds in physical format you do need to submit it at a place accepting them, so I don’t have any idea on how you could tackle this situation.

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Sriram January 10, 2011 at 3:27 am

Hi, The return after 5 yrs is Rs.29,300 for rs 20,000/-. If tax benefit is included for 20% tax bracket, the gain is Rs.13,300/- after 5 yars. Pl clarify,

1. Does one have to pay tax for this amount at the end of 5 yrs.
2. Investing in mutual fund will give far more yeald, in general, right?

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Manshu January 10, 2011 at 5:07 am

I’m not sure how you have arrived at this number Sriram, and what option you’re looking at. As for your questions – Yes, the bond is taxable, and if you take the cumulative option then you will have to pay taxes at the end of 5 years. For the interest income you will have to pay tax every year.

Mutual funds are a different kettle of fish, and especially equity mutual funds which don’t guarantee returns. So, while people might say that equity mutual funds return a higher rate over a longer time frame, they are not debt instruments, and shouldn’t be compared with these bonds.

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Shiv Kukreja January 9, 2011 at 2:40 am

Tax-Saving or Tax-Declaration season is back. No matter what, January and March are indeed the Tax Saving months and Investors, who either remain busy with their office work, business, families or other daily routines or actually get up late for these important issues in one’s life, flock to the tax saving products like there were no such products available till the start of the new calendar year. In my opinion, every person who has spare money in his/her Savings A/C. or for that matter, in fixed deposits fetching 5%-7%, must go for Tax Savings either u/s. 80C or 80CCF because one’s Bank Savings A/C. takes approx. 8.8 years to earn 30.9% i.e.; 30.9%/3.5%. With these Tax Savings you can save (or actually better to call it earn) 10.3% or 20.6% or 30.9% (depending on your tax bracket) at one go.

IFCI Infra Bonds fetch an interest rate of 8.25% without Buyback option and 8% with Buyback option. Investments can be done through demat accounts and advisable also, if you opt for higher interest rate of 8.25%, in which case you won’t be able to redeem it back to IFCI after a lock-in period of 5 years. In other words, investors going for 8.25% interest option will have to sell these bonds on the exchanges in case they want to get the liquidity for themselves. But I’m not sure who would be interested in buying these bonds after 5 years at Par value, without any tax saving benefit and who would like to sell these bonds at a value below the Par value if actually the bonds trade below it. So, in my opinion, “the most attractive option” is the cumulative scheme with a buyback after five years i.e.; option with 8% interest compounded annually. Investors who choose to exit after five years stand to benefit the most.

To invest in IFCI Infrastructure Bonds/ELSS and save tax u/s. 80CCF/80C — Delhi/NCR (including Gurgaon & Noida), Call/SMS: 9811797407.

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Rafiq Raja January 10, 2011 at 4:28 am

Manshu,

Just browsed through your site, and came to know of the wonderful articles you have blogged here, about Tax Saving and necessary instruments to do so.

Enjoyed every bit of it, and I would be visiting more often. It’s long since I participated in any Financial discussions on net, and now I have found a good place to do so.

Keep up the good job.

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Manshu January 10, 2011 at 5:08 am

Wow – thank for your kind words, and I really look forward to more comments and participation from you in the future.

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vivek goel January 11, 2011 at 1:18 am

Whether the maturity amount of these bonds will be under EET? whether full maturity amount will be taxed at the time of maturity or only interest earned will be taxed?

regards,
vivek goel

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Manshu January 11, 2011 at 8:48 am

Vivek – if you take the interest option then during redemption you will get the face value (5k) back, and so there will be no additional tax on that.

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RAVI January 11, 2011 at 4:56 am

Wonderful discussions,keep it up. however after lot of in depth study i personally feel that option I is the best because you will keep getting your interest amount every year and you will not burden it at the end of fifth year. With so much inflation what will be the value of interest earned at the end of five years. keep saving and enjoy your money.

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Manshu January 11, 2011 at 8:54 am

Thanks for your opinion Ravi – what you say makes sense to me, but as I’ve repeated countless times, what makes sense for you and me may not make sense for some one else because their situation is different, so they should evaluate these things on their own and take a final decision.

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sridhar.k January 18, 2011 at 5:01 am

already applied for IFCI and invested 20k , when do i physically receive these bonds for submission

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Manshu January 18, 2011 at 5:11 am

I’ve not heard of any news on when they are going to do so Sridhar.

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dkar January 19, 2011 at 9:51 am

IFCI bond receipts for ICICIdirect users available on icici direct website.The physical copy for IFCI will be issued after 31-Jan,as per info from ifci representative

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Manshu January 19, 2011 at 10:07 am

Thank you so much for sharing this info dkar – this would help a lot of folks!

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Siddaramana Goud January 27, 2011 at 4:07 am

I’ve Invested in IFCI Infrastructure bond, amount is deducted on 14th Jan 2011. But i haven’t received physical form of the bond. Please advice me how to proceed with this.

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Manshu January 27, 2011 at 8:20 am

No one has got them yet, so I guess the only thing right now is to wait.

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Bm January 31, 2011 at 11:48 am

How will they send physical copy of bond allotment? Is it to the present address to which they will sent by post/courier. Can we see the bond online in icici direct or ifci website?

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Manshu February 1, 2011 at 8:46 am

I think the folks who got IDFC got it via registered post, and you can’t see it online yet.

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Prabhu February 1, 2011 at 3:13 am

Hi,

I applied for IFCI Infra Bond on 27th Dec. I still dont see it in my demat account nor received any advice that it is allotted or not. Did any of you guys received any correspondence?

Thanks,
Prabhu

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Sailesh February 1, 2011 at 3:19 am

Hi, I purchased 4 IFCI infrastructure bonds worth Rs 20000 in December 2010. However, I’m yet to receive the bond (I dont have a demat account). My company needs me to provide a copy of the bond so as to claim the tax benefit.

Let me know when I’ll receive the same so that I can get the tax benefit out of it. My form number is: 2489147

Thanks!

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Manshu February 1, 2011 at 8:43 am

No one has got them yet, so you’ll have to wait longer. I don’t know when they’ll start issuing them but someone will leave a comment here, and you can check this thread or if you get an SMS that’s even better.

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naveen February 1, 2011 at 7:09 am

i had applied 4 nos bonds for ifci to exempt the income tax, but no reciept or physical recieved copy or no response letter or mail will be delivered to my e-mail ID. please send me the appropriate decision to save the income tax

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Makar Gupta February 1, 2011 at 7:18 am

This much information was available on this blog and I suffered lot. But finally invested on last day thru a local investment house. I have opted for dmat form and given the detail of my Dmat account, I am not sured if the same is processed properly.
What I can do now, should I keep checking my dmat account, email or IFCI website, or I will get some letter by post.

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Manshu February 1, 2011 at 8:19 am

Just wait for it because calling up anyone won’t expedite. Continue checking your account.

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dkar February 1, 2011 at 7:47 am

I suggest everyone to at least scroll through the discussion forum at least once before posting a question.Physical copy for IFCI is supposed to available only after 31 Jan as per the info received from IFCI representative.
Manshu,really appreciate your tolerance for replying to the same question of “how to claim tax benefit for Infra bond” 10-15 times.

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Manshu February 1, 2011 at 8:18 am

I’d like people to do that very much as it reduces overhead, but it hardly ever happens. As long as people are civil I don’t mind answering. It’s the rude ones and “do the needful” type people who tick me off, and get it from me. Thankfully those are rare, and for some reason are almost always through email.

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