Saturday, January 7, 2012

SREF 80CCF Tax Saving Infrastructure Bonds 2011-2012

With the financial year coming to a close, lot of companies are coming up with infrastructure bonds which can help save tax on Rs 20000 under section 80ccf. SREI Infrastructure Finance Ltd has come out with infrastructure bond issue with a tenor of 10 years and 15 years with a face value of Rs 1000 per bond.

The issue opens on 31st December 2011 and shall close on January 31 2012.

There are four options available:
1. 8.90% interest rate with annual interest payment and a tenor of 10 years.
2. 8.90% interest rate with cumulative interest payment at the time of maturity and a tenor of 10 years.
3. 9.15% interest rate with annual interest payment and a tenor of 15 years.
4. 9.15% interest rate with cumulative interest payment at the time of maturity and a tenor of 15 years.

For all four options, the buyback period is 5 years.

The bond issue has got a rating of CARE AA from CARE which indicates a high degree of safety but is lower than other bond issues of IFCI, PFC, REC etc.

For investors interested in this bond issue, it makes sense to prefer the 15 year series over the 10 year one, take advantage of the extra rate of interest and then exercise buyback at the end of 5 years. 


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