What is 80CCF?
Table of Contents
What is 80CCF?
Section 80CCF of the IT Act contains provisions for certain tax deductions, in a bid to attract investors and utilise funds efficiently. The current maximum deduction an individual is entitled to stands at Rs 20,000 per year, for investments in infrastructure and other tax saving bonds.
How do I invest in 80CCF bonds?
Here are other criteria to consider while choosing bonds to invest in:
- The tenure of the bond must be ten years or more, with a lock-in period of five years.
- It may be in physical or Demat form.
- The interest earned from these bonds is taxable and must be added to your taxable income.
Are infrastructure bonds taxable on maturity?
Taxation. As the interest on long-term infrastructure bonds are taxable, the interest earned – annually for the investors opted for annual option and aggregate on maturity for the investors opted for the cumulative option – by the investors will be added to the taxable income of the respective investors.
What is the interest rate on infrastructure bonds?
Most infrastructure bonds that have been launched have a coupon (interest rate) between 7.5 per cent and 8.25 per cent. The second series of bonds issued by IFCI, which concluded recently, had a coupon of 8 per cent with a buyback option after five years and 8.25 per cent with no buyback option.
What is RBI tax free bonds?
(ii) Wealth tax: The Bonds will be exempt from Wealth-tax under the Wealth- tax Act, 1957. (i) The Bonds will be issued at par i.e. at Rs. 100.00 percent….Saving Bonds.
|Tenor of holding||Amount payable per Rs.1000 invested|
|7th half year||Rs. 1016.25||Rs.1231.25|
|8th half year||Rs. 1016.25||Rs.1271.20|
Is interest from infrastructure bond taxable?
Taxation of Infrastructure Bonds The interest accrued will be added to the individual’s income before being taxed depending upon the individual’s income tax slab. In case the yearly income is lower than Rs. 2500, no tax will be deducted at source. Since individuals can claim income tax deduction in excess of the Rs.
Where do you show income from infrastructure bonds?
“The interest derived from Long-Term Infrastructure Bonds would be taxable under the head ‘Income from Other Sources’ in the hands of the investor.
Are infrastructure bonds a good investment?
Infrastructure bonds are good for people who need a fixed income. They offer a decent rate of interest and tax benefits. The maturity of these bonds is often between 10 to 15 years with an option to buy-back after a lock-in of 5 years.
What are the two benefits of investing in infrastructure bonds?