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section 80CCF – Deduction in respect of long-term infrastructure bonds

In tune with the policy thrust of promoting investment in the infrastructure sector, it is proposed to insert a new section 80CCF in the Income-tax Act to provide that subscription during the financial year 2010-11 made to long-term infrastructure bonds (as may be notified by the Central Government), to the extent of Rs. 20,000, shall be allowed as deduction in computing the income of an individual or a Hindu undivided family.

 Additional deduction for individuals in respect of long-term infrastructure bonds under section 80CCF of Income-tax Act 

In tune with the policy thrust of promoting investment in the infrastructure sector, it is proposed to insert a new section 80CCF in the Income-tax Act to provide that subscription during the financial year 2010-11 made to long-term infrastructure bonds (as may be notified by the Central Government), to the extent of Rs. 20,000, shall be allowed as deduction in computing the income of an individual or a Hindu undivided family. This deduction will be over and above the existing overall limit of tax deduction on savings of upto Rs.1 lakh under section 80C, 80CCC and 80CCD of the Act.

This amendment is proposed to take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-12.

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The Central Government have specified bonds to be issued by (i) Industrial Finance Corporation of India; (ii) Life Insurance Corporation of India; (iii) Infrastructure Development Finance Company Limited; and (iv) a Non-Banking Finance Company classified as an infrastructure finance company by the Reserve Bank of India; as “Long-term Infrastructure Bond” for the purpose of section 80CCF of the Income Tax Act, 1961.

Investment in these bonds up to rupees twenty thousand will be eligible for deduction from the total income of the assessee. The deduction will be in addition to the deduction of rupees one lakh allowed under sections 80C, 80CCC and 80CCD of the Act.

The tenure of the Bonds shall be a minimum of ten years with a lock-in period of five years for an investor. It will be mandatory for the subscriber to furnish permanent account number to the issuer for investment in the bonds.

Categories: Income Tax

View Comments (32)

  • I have bought infrastructure bonds worth Rs20,000 in my wife's name. Can I not get tax benefit for the same. My wife is a house-wife.
    If not, can I get it transfered in my name now?

  • the Deduction U/s 80CCF is available only if limit U/S80C of lac is Fully Utilised?

    or

    without compliting the benefit U/S 80C I can Take New Bonds And Enjoy the banefits U/S80CCF ?

    • No, there is no such restriction of fully utilising 1lac limit of 80C before claiming deduction upto Rs.20,000 under 80CCF, it can be claimed even if you don't have any other savings of 80C. As of now, this exepmtion is available only for the AYs 2011-12 and 2012-13.

  • What if I invest Rs.1,20,000 in infra bonds. Will i get exemption U/S 80C and 80CCF both to the extent of Rs.1,20,000???

    If i have already exhausted deduction U/S 80C will i be eligible for additional 20000 u/s 80CCF

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  • I have bought infrastructure bonds worth Rs20,000 in my wife’s name. Can I not get tax benefit for the same. My wife is a house-wife.
    If not, can I get it transfered in my name now?

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