L&T has come up with the second tranche of their infrastructure bonds, and this will be open from the 7th Feb 2011 to the 7th March 2011.
The bonds are issued under section 80CCF so they will get you an additional tax relief in the form of reduction of taxable salary outside of what you get under Section 80C.
L&T Infra bonds have been rated CARE AA+ by CARE which denotes low credit risk. The bonds can be purchased in the physical or Demat form, and the minimum investment needed in the bond is Rs. 5,000.
There are two series on offer by L&T and the maturity period of both the series is 10 years. However, there is a buyback option that can be exercised by you at the end of either 5 or 7 years.
Here are some details about this issue.
As you can see above the series which pays annual interest rate has a slightly lower interest payment at 8.20% when compared with the series that pays out cumulative interest. Personally, in the high interest scenario we are in I’d go for the slightly lower interest rate for getting an annual payout, but that’s just my preference.
You can invest in these bonds through your trading accounts like ICICI Direct, through financial advisers, or you could do it directly by filling out a form, and submitting it in one of the collection centers.