IDFC Infrastructure bonds

CA Ankur Luhadia (Chartered Accountant) (72 Points)
Replied 01 October 2010

Thanks for the information.

can you pls explain me some of my issue in this infra bonds:-

1. Does the return that we get after maturity is taxable.

2. Which option is better (a) to invest in FD of Rs. 100000 for 5 years at compounded annual interest rate of 9% and take 80C benefit and having better liquidity and giving me better reurn than this bond or to invest in this bonds for 5 years at the rate of 7.5% with no liquidity till 5 years lock-in.

amit jain (proprietor) (33 Points)
Replied 01 October 2010

1. Interest is taxable at maturity.

2. Bank FD falls under 80 C where as the infra bonds have seperate category under 80ccf. The limit for infra bond is over and above Rs.1 lac under 80C. For additional exemption of Rs.20000 the only option is infra bonds. hence comparing fd with infra bond will not be correct

Vishal (Online Marketing) (658 Points)
Replied 07 October 2010

Your investment in these "long-term infrastructure bonds" will be eligible for a deduction under section 80CCF of the Income Tax Act, 1961 subject to a maximum limit of Rs 20,000. This deduction limit of Rs 20,000 will be over and above Rs 1,00,000 benefit available under section 80C, 80CCC and 80CCD.

Should we invest in IDFC Long term infrastructre Bond?

amit jain (proprietor) (33 Points)
Replied 12 October 2010

One more good news. I hear that demat is no longer compulsory for the bonds. If you wish you can opt for physical also.

Vishal (Online Marketing) (658 Points)
Replied 14 October 2010

IDFC's long-term infrastructure bonds, appears enticing only from a tax planning perspective, as an investment upto Rs 20,000 will be eligible for an additional (over and above Rs 1,00,000 benefit limit available under section 80C, 80CCC and 80 CCD of the Income Tax Act, 1961) tax benefit.

amit jain (proprietor) (33 Points)
Replied 25 October 2010

If you have any Idea how much the issue has collected please let me know

Lifins Financial (Owner) (41 Points)
Replied 16 January 2011

IDFC Infrastructure Bonds Tranche 2, Tax Benefit u/s 80CCF

For More Details visit on www.lifins.in

or

call on 9822403407

- Lifins Financial, Pune, Maharashtra, India.

Company profile

About the company :

IDFC has been sponsored by the Government of India as a key institution to facilitate infrastructure development in the country. The focus areas for IDFC continue to be the Energy, Telecom, Industrial & Commercial Transportation sectors, although the company is also targeting the Healthcare, Education and urban Infrastructure sectors. IDFC also works with state and national level entities to formulate policies aimed at expediting infrastructure development in the country. Recently, IDFC has been classified as an infrastructure NBFC.

IDFC is a leading knowledge-driven financial services company in India and plays a central role in advancing infrastructure development in the country. IDFC is a one-stop-shop for all products and services across the infrastructure value chain. Established in 1997 as a private sector enterprise by a consortium of public and private investors, the Company listed its Equity Shares in India pursuant to an initial public offering in August 2005.

Financial Performance:

IDFC has been Diversifying from infrastructure loan lending business to other sectors. These new sectors are expected to be the growth drivers in the future. The company has continued its strong growth during the FY 2009-10, which is reflected in its improved financial performance in comparison with FY 2008-09

 Balance sheet size has increased from Rs 31,982 Crs to Rs 46,423 Crs.

 Non-performing Advances (NPAs) were 0.17% of total loan assets.

 Net worth has increased from Rs. 6176 Crs to Rs. 7010 Crs.

 Profit Before Tax increased by 137% from Rs 965 Crs to Rs 1317 Crs

 Profit After Tax grew by 138% from Rs 736 Crs to Rs 1013 Crs.

Salient features of the bond issue (Tranche II)
l Second Tranche of public issue of bonds by an infrastructure finance company under Sec 80 CCF
l Credit rating agency ICRA has rated the Bonds under this offer as “LAAA” and FITCH has rated the bonds “AAA” with stable outlook, indicating highest safety.
l These bonds will be issued only to Resident Indian Individuals (Major) and HUF.
l There are 2 investment options, suiting the needs of different categories of investors.
l No TDS shall be deducted from interest on Tranche 2 Bonds, if such interest does not exceed Rs 2,500 in a financial year.
l The bonds will be listed on NSE & BSE and can be traded after the 5 year lock – in period.
l Investors can mortgage or pledge these bonds to avail loans after the lock-in period.
l Under Section 80 CCF of the I.T. Act, an investor in such infrastructure bonds will be entitled to tax deduction of investments of up to Rs 20,000. The deduction is over and above the Rs 1,00,000 deduction available under section 80C, 80CCC & 80CCD read with section 80CCE.
Issue Structure:
l Maturity: The Bonds, with a maturity of 10 years, will be issued in 2 series.
l Face Value: Each Bond has face value of Rs 5,000 each.
l Minimum application: Rs 10,000 or 2 bonds. The bonds can be of the same series or 2 bonds

across different series.
l Lock in: 5 years from the date of allotment.
l Buyback facility: Available for both the Series 1 & 2.
l Bond Issue Profile: (Tranche II)

Issue Opens on: 17th Jan11. Issue Closes on:4th Feb 11.

Series	I	II
Interest Payment	Annual	CuMULATIVE
Minimum Application	2 bonds and in multiples of one bond thereafter
Face Value (Rs. / Bond)	Rs.5,000/-	Rs.5,000/-
Interest Rate (%) p.a.	8%	N/A
Yield on Maturity (%) p.a.	8.00%	8.0% compounded annually
Maturity	10 years	10 years
Redemption Amount per bond	Rs 5,000	Rs 10,800
Buy back Facility	YES	YES
Buyback Date (from allotment)	5 years	5 years
Buyback Intimation Period	The period beginning not before 9 months prior to the Buyback Date and ending not later than 6 months prior to the Buyback Date
Buy back Amount (Rs)	Rs 5,000 per bond	Rs 7,350 per bond
Buy back Yield (%)	8.00%	8.0% compounded annually

For More Details visit on www.lifins.in

or

call on 9822403407

- Lifins Financial, Pune, Maharashtra, India.

Lifins Financial (Owner) (41 Points)
Replied 16 January 2011

REC Tax Saving Long Term Infrastructure Bonds–Tax Benefit u/s 80CCF

Issue closes: 28^th March 2011.

For More Details visit on www.lifins.in

or

call on 9822403407

- Lifins Financial, Pune, Maharashtra, India.

Click below link to download application form.

https://www.lifins.in/images/bond/rec.pdf

About the company :

Rural Electrification Corporation Limited (REC), a NAVRATNA Central Public Sector Enterprise under Ministry of Power, was incorporated on July 25, 1969 under the Companies Act 1956. REC a listed Public Sector Enterprise Government of India with a net worth of Rs. 11,080 Crore as on 31.03.10. Its main objective is to finance and promote rural electrification projects all over the country. It provides financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperatives for rural electrification projects as are sponsored by them.

REC provides loan assistance to SEBs/State Power Utilities for investments in rural electrification schemes through its Corporate Office located at New Delhi and 17 field units (Project Offices), which are located in most of the States.

Salient features of the issue:

❖Credit rating: ‘AAA /Stable’ by CRISIL, ‘CARE AAA’ by CARE ,’LAAA’ by ICRA, ‘AAA(IND) by Fitch

❖These bonds will be issued to Resident Indian Individuals (Major) and HUF.

❖ There are 2 investment options.

❖The bonds will be listed on NSE & BSE.

❖ Issuance/Trading - In Dematerialized and Physical Form

❖ Issue Structure:❖

l ❖Maturity: The Bonds, with a maturity of 10 years, will be issued in 2 option.

l ❖Face Value: Each Bond has face value of Rs 5,000 each.

l ❖Minimum application: Rs 10,000 or 2 bonds.

l ❖Lock in: 5 years from the date of allotment in Option 1.

❖Buyback facility: Available in the Option 1.

Issue Opens on: 12th Jan 2011.

Issue Closes on: 28th March 2011.

BUYBACK PROCEDURE: The investors, who opt and are allotted bonds with buyback facility and wish to exit through this facility after 5/6/7/8/9 years, shall have to give his consent in the application form to the company. However, any bondholder(s) desires to change his option, will have to intimate the Registrar between January 1 to January 31, starting from year 2016 till 2020.

•Benefits to investors :
• Bonds offer an additional window of tax deduction of investments of up to Rs 20,000 which result in attractive yield to investors. Under Section 80 CCF of the I.T. Act, an investor in such infrastructure bonds will be entitled to tax deduction of investments of up to Rs 20,000. The deduction is over and above the Rs 1,00,000 deduction available under section 80C, 80CCC & 80CCD read with section 80CCE.

Option	I	II
Option	Buyback Option after 5 Years (Annual Coupon)	No Buyback (Redemption After 10Years) (Annual Coupon)
Minimum Application	2 bonds and in multiples of one bond thereafter
Face Value (Rs. / Bond)	Rs.5,000/-	Rs.5,000/-
Interest Rate (%) p.a.	8%	8.10%
Interest Payment	Yearly	Yearly
Interest Payment Date	31st March Every Year	31st March Every Year
Maturity Date	31st March, 2021	31st March, 2021
Buy Back Option	YES	No
Buy Back after	5/6/7/8/9 Years	No.

For More Details visit on www.lifins.in

or

call on 9822403407

- Lifins Financial, Pune, Maharashtra, India.

Lifins Financial (Owner) (41 Points)
Replied 08 February 2011

L&T Infrastructure Finance Co. Ltd- Bonds

Tax Benefit U/s 80CCF Application Form.

For More Details visit on www.lifins.in or call on 9822403407 / 9371011297

- Lifins Financial, Pune, Maharashtra, India.

Company profile

L&T Infrastructure Finance Company Limited, a 100% subsidiary of Larsen & Toubro Limited, was incorporated in 2006, and is registered with the RBI as a systemically important non deposit taking NBFC and classified as an IFC. The company’s business comprises the provision of financial products and services for customers engaged in infrastructure development, construction and operations & maintenance with a focus on the power, roads, telecommunications, oil and gas and ports sectors in India.The company is registered with the RBI as an Infrastructure Finance Company, or "IFC", which allows it to optimize its capital structure by diversifying its borrowings and accessing long-term funding resources, thereby expanding its financing operations while maintaining its competitive cost of funds. The total income of the company for Fiscal Year 2010 was Rs. 4,504.23 million. The total loans and advances outstanding of the Company as at March 31, 2010 were Rs. 42,884.99 million and total disbursements for Fiscal Year 2010 were Rs. 37,955.14 million.

Salient features of the bond issue

• Public issue of bonds by an infrastructure finance company under Sec 80 CCF

• Rating(s) : - CARE AA+ by CARE and LAA+ by ICRA

• These bonds will be issued only to Resident Indian Individuals (Major) and HUF.

• The bonds will be issued in either demat form or physical form at the option of bondholders

• No TDS shall be deducted for bonds issued in demat form. In case of bonds issued in physical form, TDS will deducted in case interest amount exceeds Rs.2,500 p.a.

• The bonds will be listed on NSE and can be traded after the 5 year lock - in period

• Investors can mortgage or pledge these bonds to avail loans after the lock-in period.

Option	Series 1	Series 2
Interest Payment	Annual	Cumulative
Coupon(%) p.a.	8.20%	8.30%
Buyback After	5 years and 7 years
Maturity	10 years	10 years
Maturity Amount per bond	1000	2219

Benefits to investors :

• Under Section 80 CCF of the I.T. Act, an investor in such infrastructure bonds will be entitled to tax deduction of investments of up to Rs 20,000. The deduction is over and above the Rs 1,00,000 deduction available under section 80C, 80CCC & 80CCD read with section 80CCE.

Issue Highlights

Issue Opens : 7th February, 2011

Issue Closes : 7th March, 2011

Face Value : Rs.1000/-

Minimum Application Size : 5 Bonds and multiples of 1 Bond

Maturity Period : 10 Years from the date of Allotment

Lock in period : 5 years from the Date of Allotment

Buy Back Option : Available at the end of 5 year & 7 years

Also, following documents are required along with the application form:

1] PAN Card Photo Copy attested by you,

2] Address Proof photocopy attested by you.

3] One cancelled cheque

4] One Cheque of Investment amount.

Indian Infrastructure Finance Company Ltd(IIFCL)

Infra Bonds Application Form- Tax Benefit U/s-80CCF

For More Details visit on www.lifins.in or call on 9822403407 / 9371011297

- Lifins Financial, Pune, Maharashtra, India.

About the company :

IIFCL is a wholly-owned Government company providing financial assistance to long-term infrastructure projects. As on 30 Sept 2010; 105 of the 124 projects for which IIFCL has sanctioned finances. As on March 31, 2010 and September 30, 2010, it had no non-performing advances. The GoI has identified infrastructure development as a key priority and the Eleventh 5 Year Plan (FY 2008-2012) and envisage investments of US$ 514 bn. in the Indian infrastructure sector. Thus, IIFCL is expected to play a prominent role in the infrastructure finance space in India going forward.

IIFCL provides financial assistance to long-term infrastructure projects like roads, railways, seaports, airports, inland waterways, power, waste management, and physical infrastructure in urban areas; gas pipelines, infrastructure projects in SEZs; and other tourism related infrastructure projects. It also provides re-finance for loans sanctioned by banks and other eligible institutions.

Salient features of the issue:

Public Issue of Secured, Redeemable, Non-Convertible Debentures having benefits u/s 80CCF of the Income Tax Act. The Bonds will be issued in one or more tranches aggregating upto INR 1,20,000 Lakhs.

Issue highlights:

Ø Object of the Issue: The Bonds will be in the nature of debt and will be eligible for capital allocation.

Ø Face Value of Bond: INR 1,000/- (Rupees One Thousand Only)

Ø Minimum Application: Rs 5,000 or 5 bonds

Ø Pay-in Amount: Full (100%) amount on Application

Ø Lock-in Period: Five (5) Years from the deemed date of allotment

Ø Allotment Form: Demat and Physical form

Ø Security Cover: One time of the total outstanding bond

Ø Credit rating: CRISIL: “AAA/Stable” and CARE : “CARE AAA” stable -highest safety.

Ø These bonds will be issued only to Resident Indian Individuals (Major) and HUF.

Ø Available in 4 Series: Series I & II having maturity of 10yrs and Series III & IV having maturity of 15yrs.

Ø Interest Rates: rate 8.15% p.a. (Series I and II) and 8.30% p.a. (Series III and IV).

Ø Investors can mortgage or pledge these bonds to avail loans after the lock-in period.

Issue summary:

Ø Issue opens: February 04, 2011.

Ø Issue closes: March 04, 2011.

Ø Listing: Bombay Stock Exchange Limited (“BSE”)

Also, following documents are required along with the application form:

1] PAN Card Photo Copy attested by you,

2] Address Proof photocopy attested by you.

3] One cancelled cheque

4] One Cheque in fovour of “IIFCL- Public Bond Issue Account”

Bond Issue Profile: (First Tranche)
Options	Series I	Series II	Series III	Series IV
Interest Payment	Annual	Cumulative	Annual	Cumulative
Face Value (RS/Bond)	Rs.1,000/-	Rs.1,000/-	Rs.1,000/-	Rs.1,000/-
Minimum Application	5 Bonds and in multiples of 1 bond thereafter
Coupon (%) p.a.	8.15%	8.15%	8.30%	8.30%
Maturity	10 years	10 years	15 years	15 years
Redemption Amount per bond	Rs 1,000 per Bond	Rs 2,189	Rs 1,000 per Bond	Rs 3,307
Buy back Facility	Yes	Yes	Yes	Yes
Buy back date	5 years	5 years	7 years	7 years
Buy back Amount(Rs.)	Rs 1,000 per Bond	Rs 1,480 per Bond	Rs 1,000 per Bond	Rs 1,747 per bond

Lifins Financial (Owner) (41 Points)
Replied 24 September 2011

Infrastructure Bonds for 2011-2012 with Tax benefit u/s 80CCF.

IFCI Ltd,

LIC,

IDFC,

L&T Infrastructure Finance Company Limited,

Rural Electrification Corporation Limited (REC),

Power Finance Corporation Limited (PFC),

Indian Infrastructure Finance Company Ltd(IIFCL) s

Tranches 1/2/3/4/5/6

Series: 1/2/3/4/5/6/

Save Tax on Rs. 20,000/-

For investment visit www.lifins.in or call on 9822403407, 9371011297

Contact us for Investment:

Lifins Financial
968/1, Senapati Bapat Road,
Opposite Ratna Memorial Hospital,
Between ATM of PNB and Vidya Sahakari Bank, Pune 411016,
Contact No: 09822403407 , 09371011297
Email id : sk @ lifins.in
lifinsfinancial @ gmail.com
www.lifins.in

Vaibhav Joshi (others) (45 Points)
Replied 16 November 2016

Is it better to opt for the buyback offer or wait till maturity for IDFC Long Term Infra Bonds (2011-12) from yields perspective??

What will be the tax treatment for both these scenarios?

Awaiting for an early reply as I've to give consent by 21st Nov.

Vaibhav Joshi (others) (45 Points)
Replied 05 July 2017

Hello,

How should one look at the taxability of the buy back option for IDFC infrastructure bonds Tranche1 issued in Dec. 2011?

I had invested Rs. 20,000/- and opted for cumulative buy back option. It got exercised after 5 years lock in in Dec. 2016 and I received a sum of Rs. 30,780/-

Que: Should I include Rs. 10,780 (interest income?) as income from other sources to be taxed as per my tax slab? OR it has to be considered as long term capital gains and taxed as per debt LTCG (20% with indexation)?