Government sets 10-year tenure for tax-saving infrastructure bond
10 July 2010
Bonds of a minimum tenure of 10 years issued by the Industrial Finance Corporation of India, Life Insurance Corporation of India, Infrastructure Development Finance Company Limited and any non-banking finance company classified as an infrastructure finance company by the Reserve Bank of India as "long-term infrastructure bond' is eligible for tax exemption under section 80CCF of the Income Tax Act, 1961, the govern mat said on Friday.
Investment in these bonds up to Rs20,000 will be eligible for deduction from the total income of the assessee. The deduction will be in addition to the deduction of Rs1 lakh allowed under sections 80C, 80CCC and 80CCD of the Act.
The tenure of the bonds should be minimum of ten years with a lock-in period of five years for an investor.
For investments in such bonds, the investor has to mandatorily furnish permanent account number to the issuer, the government release said.