Infrastructure Bonds issued by IFCI, IDFC and other NBFC classified as infrastructure company and approved by RBI are covered u/s 80 CCF of Income tax Act for income tax exemption for income up to Rs.20,000 in a financial year. An Individual or HUF can invest in these new infrastructure Bonds. Main features of this new provision of Income Tax Act are as follows.New section can be availed by individual or HUF only.

• Rs. 20000/- can be invested in a Financial year to avail deduction under section 80CCF
• Rs. 20000/- Limit is in addition to 100000/- Limit of section 80C,80CCC,80CCD
• Tenure of the Bonds will be 10 Years.
• However Lock in period is 5 years, after 5 years investor can withdraw money from the bonds.
• After lock in period ,Investor can take loan against these Bonds.
• Issuer of the Bonds is LIC,IFCI,IDFC and other NBFC classified as infrastructure company.
• Permanent account Number is must to apply for these bonds.
• Yield of the bond – The yield of the bond shall not exceed the yield on government securities of corresponding residual maturity, as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond.