Overview

What are infrastructure bonds?
To channelize long term retail flows into the Infrastructure sector, the Government of India had introduced Section 80CCF under the Income Tax Act, 1961 (‘the Act’). This section provides for an income tax deduction for an individual investor who subscribes in the Long-Term Infrastructure Bonds (‘Bonds’), issued by certain financial institutions.

Presently, individual investors have various options to invest upto Rs 1 lakh into various instruments such as PPF, Insurance, ELSS etc as allowed under sections 80C, 80CCC and 80CCD of the Act.

An investment in infrastructure bonds under Section 80CCF is an additional window to save tax upto Rs 20,000, over and above the Rs 1 lakh limit already available.

[Source:http://www.idfc.com]