80ccf

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Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2011 kindly remove my doubts relating 80ccf, as for as i know that this section is applicable for fy 11-12 & onwards but one of my friend told me that it was applicable from fy 2010-11 & onwards.

plz reply ASAP

thanks in advance.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 August 2011 Yes Applicable from FY 2010-11.

Section 80CCF of the Income-tax Act, 1961 – Deduction – In respect of subscription to long-term infrastructure bonds – Notified long-term infrastructure bond

Notification No. 48/2010[F.No.149/84/2010-SO(TPL)], dated 9-7-2010

In exercise of the powers conferred by section 80CCF of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies bonds, subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section namely :-

(a) Name of the bond – The name of the bond shall be “Long-term Infrastructure Bond”.
(b) Issuer of the bond – The bond shall be issued by :-
(i) Industrial Finance Corporation of India;
(ii) Life Insurance Corporation of India;
(iii) Infrastructure Development Finance Company Limited;
(iv) a Non-Banking Finance Company classified as an Infrastructure Finance Company by the Reserve Bank of India;

(c) Limit on issuance – (i) The bond will be issued during financial year 2010-11;

(ii) the volume of issuance during the financial year shall be restricted to twenty-five per cent of the incremental infrastructure investments made by the issuer during the financial year 2009-10;

(iii) ‘Investment’ for the purposes of this limit include loans, bonds, other forms of debt, quasi-equity, preference equity and equity.

(d) Tenure of the bond. – (i) A minimum period of ten years:

(ii) the minimum lock-in period for an investor shall be five years:

(iii) after the lock in, the investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue document at the time of issue;

(iv) the bond shall also be allowed as pledge or lien or hypothecation for obtaining loans from Scheduled Commercial Banks, after the said lock-in period;

(e) Permanent Account Number (PAN) to be furnished – It shall be mandatory for the subscribers to furnish there PAN to the issuer;

(f) Yield of the bond – The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity, as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond;

(g) End-use of proceeds and reporting or monitoring mechanism – (i) The proceeds shall be utilizes towards ‘ infrastructure lending’ as defined by the Reserve Bank of India in the Guidelines : issued by it ;

(ii) the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certified by the Statutory Auditor of the issuer;

(iii) the issuer shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, Ministry of Finance within three months from the end of financial year.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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04 August 2011 Section 80CCF of the Income-tax Act, 1961 - Deduction - In respect of subscription to long-term infrastructure bonds - Notified long-term infrastructure bond

NOTIFICATION NO 77/2010

Dated : October 11, 2010

In exercise of the powers conferred by section 80CCF of the Income Tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following bonds that shall be subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section, namely:-

(a) Name of the bond: “Long term infrastructure Bond” of India Infrastructure Finance Company Ltd. (IIFCL)

(b) Issuer of the bond: “Long term infrastructure Bond” of India Infrastructure Finance Company Ltd. (IIFCL)

(c) Limit on issuance

(i) The bond shall be issued during the financial year 2010-2011;

(ii) the volume of issuance during the financial year shall be restricted to twenty-five percent of the incremental infrastructure investments made by the issuer during the financial year 2009-2010;

(iii) ‘investments’ for the purposes of this limit shall include loans, bonds, other forms of debt, quasiequity, preference equity and equity;

(d) Tenure of the bond-

(i) a minimum period of ten years;

(ii) the minimum lock-in period for an investor shall be five years

(iii) after the lock-in, the investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue documents at the time of issue;

(iv) the bonding shall also be allowed as pledge or lien or hypothetication for obtaining loans from Scheduled Commercial Banks, after the said lock-in period;

(e) Permanent Account Number (PAN) to be furnished:- It shall be mandatory for the subscribers to furnish their PAN to the issuer;

(f) Yield of the bond:- The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond;

(g) End-use of proceeds and reporting or monitoring mechanism- (i) The proceeds shall be utilized towards ‘infrastructure lending’ as defined by the Reserve Bank of India in the Guidelines issued by it;

(i) the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certified by the Statutory Auditor of the issuer;

(ii) the issuer shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, Ministry of Finance within three months from the end of financial year.

F.No.178/31/2010-SO (ITA.1)

(Raman Chopra)

Director-ITA.1

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