Tuesday, January 10, 2012

IDFC 80CCF Tax Saving Infrastructure Bonds (Tranche 2) 2011-2012

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IDFC has come out with the second tranche of tax saving long term infrastructure bonds. IDFC came out with the first tranche in November, 2011 and offered higher interest rate than the second tranche. Investors will get tax benefit on Rs 20,000 under Section 80ccf. This is additional tax benefit over Rs 1 Lac under Section 80c.

The issue shall open on 11 January and shall close on 25 February, 2012.

IDFC offers 8.70% interest rate with two options:

- Annual in which interest will be paid annually
- Cumulative in which interest will be paid along with principal at maturity

Maturity period is 10 years with buyback option after 5 years. Both ICRA and Fitch have rated these bonds as AAA.

REC is offering higher interest rate for similar tax saving infrastructure bonds, so investors can invest in that issue instead of this one.
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