Thursday, December 8, 2011

L&T 80ccf Tax Saving Infrastructure Bonds 2011-2012: Review

After IDFC, L&T has come out with tax saving infrastructure bonds 2011B Series and plans to raise Rs 1100 crore with this issue. Investors can help save tax up to Rs 20,000 under section 80ccf. This is an additional tax saving option that was introduced by government over and above Rs 1 lakh limit under section 80c.

L&T Infrastructure tax saving bonds issue opens from 25 November, 2011 and shall close on 24 December, 2011.

The investors will get an interest rate of 9% per annum. There are 2 options avaialable:
- Non-Cumulative: The interest rate will be paid annually
- Cumulative: The interest will be reinvested and paid at the time of maturity giving better return

The minimum application is 5 bonds and each bond costs Rs 1000 each. The bonds mature in 10 years but can be sold after 5 years lock-in on BSE where they will be listed.

CARE and ICRA has assigned AA+ ratings to these bonds.

These Infrastructure Bonds 2011B Series (Tranche-1) is the first in the series for this financial year from L&T and there may be another one near march 2012. Investors might want to consider infrastructure bonds offered by IFCI as they are offering higher interest rate.

The NRIs cannot invest in this infra bond scheme.




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