IDFC has re issued its infrastructure bonds which has a tax benefit of upto Rs 20,000 which is over and above the Rs100,000 of the 80C section.
Last year IDFC had come out with a similiar bond however which was at a lower interest rate of 7.5% ( here is the previous post on this - LINK)
This time the interest rate is 8% per annum. The investment will be for a period of 10 years and one of the good things about this is that this will be also available in demat form- so no need of ensuring that the paperwork is safe and sound for 10 years. ( You can still avail of the physical copy of the bonds if you so desire).
Most banks and brokers are accepting the money and the forms. You can go to the following link to see which all banks/ brokers or where you can actually invest online.
http://idfc.com/infrastructure-bond/distributors.htm
Does it make sense?
Yes it does.
At an 8% coupon rate you save 30% tax if you are in the top most bracket which means that you reduce your tax liability by 6000Rs when you invest 20,000 which is the maximum for the tax benefit.
This implies that the pre tax return that you will get is 8/0.7 =11.42%
Compared to an FD this makes a lot of sense.
Now if you are planning to invest more than 20,000 Rs - you can. However as i mentioned before that there is no tax benefit over Rs 20K and there are FD's available in the market which give much better pre tax returns ( IDBI has a 9.25% per annum scheme).
The last date is Feb 4th.
Go ahead- Apply for it
Happy Investing
( Dont forget to subscribe using the links on the right or become a follower of the blog)
Other similiar links
http://simplefinancialsense.blogspot.com/2010/10/idfc-bonds-do-apply.html
http://simplefinancialsense.blogspot.com/2010/07/titans-gold-harvest-scheme.html
Last year IDFC had come out with a similiar bond however which was at a lower interest rate of 7.5% ( here is the previous post on this - LINK)
This time the interest rate is 8% per annum. The investment will be for a period of 10 years and one of the good things about this is that this will be also available in demat form- so no need of ensuring that the paperwork is safe and sound for 10 years. ( You can still avail of the physical copy of the bonds if you so desire).
Most banks and brokers are accepting the money and the forms. You can go to the following link to see which all banks/ brokers or where you can actually invest online.
http://idfc.com/infrastructure-bond/distributors.htm
Does it make sense?
Yes it does.
At an 8% coupon rate you save 30% tax if you are in the top most bracket which means that you reduce your tax liability by 6000Rs when you invest 20,000 which is the maximum for the tax benefit.
This implies that the pre tax return that you will get is 8/0.7 =11.42%
Compared to an FD this makes a lot of sense.
Now if you are planning to invest more than 20,000 Rs - you can. However as i mentioned before that there is no tax benefit over Rs 20K and there are FD's available in the market which give much better pre tax returns ( IDBI has a 9.25% per annum scheme).
The last date is Feb 4th.
Go ahead- Apply for it
Happy Investing
( Dont forget to subscribe using the links on the right or become a follower of the blog)
Other similiar links
http://simplefinancialsense.blogspot.com/2010/10/idfc-bonds-do-apply.html
http://simplefinancialsense.blogspot.com/2010/07/titans-gold-harvest-scheme.html
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