Investing in InfraBond...

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m-jeri

m-jeri

A Nobody.
Innovator
Hi..

Any finance experts explain a bit abt Infra bonds as a investment. For tax benefits also.

I saw a ICICI one which shows face value 1000. for both Cumulative and Annual.

Whats the diff between both?

The maturity amount for cumulative is 2300 while the annual is still 1000.

which one is best to invest?

Thanks

m-J
 
Well, infra bonds are a good for tax benefits. You will need to declare it in your papers, plus there might be more formalities.

For the annual one, you will recieve a cheque/ECS credit for the interest in the year.

For the cumalative option, at time of maturity of the bond ~ 5/10 yrs or whatever is the time period, you will receive your principle amount + interest.

However, do check with someone about the amount that is really tax free. IMO, you can only invest a certain amount in bond for tax benefits. And the interest earned is taxed, obviously.
 
ooh... so thats the difference.

u get a check everyyear for annual for the period. In Cumulative u get them together at the end.
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I think the limit is 20k INR.
 
ICICI you saw may be of agency as they dont have permit to offer Infra bonds in open market.

As of now, you have IFCI & L&T Fin. Few others are coming too. If you are IT guy looking to submit proof then go ahead & take, Dont wait for others as they may launch in March by then your companies deadline would be over.

If you are in 30 % bracket then you save around 6810 Rs in tax. For 20 % is bit less. If you are in 10 % bracket does not make sense to invest in Infra bonds as of now.

Go with Cumulative option as this will accumalate interest in Cumulative way & you have more returns on it.
 
Also, rather than investing in these, if you have a minor, open a PPF account for them and invest 1 lakh max a year there. Full tax free, interest too. But the lock in is 15 years, though after 5 years, you can withdraw some 60% of the amount, afaik.
 
PPF is already covered in 80C which has a limit of 1 lac. For infra bonds, there is an additional limit of 20k.

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Most of good Infra Bonds are already done and the remains are those IFCI Bonds (avoid them completely)
 
Do you mean Tax Free amount allowed for year 2011-2012 is Rs.1.20K (1L in FD + 20k in Infra Bond)

honest1 said:
PPF is already covered in 80C which has a limit of 1 lac. For infra bonds, there is an additional limit of 20k.

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Yes Infra bond is above 1 lakh amount invested.And limit for claiming it upto 20k.

Also praks post sums it all.

As said if you salary class do invest now as form 16 would be filed by your company and you will have to give details.

If you get late and than invest than you might have to go through refund process.
 
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