India’s largest insurer LIC today said its infrastructure bond issue is unlikely to hit markets this fiscal as it is still working out the modalities. “We are working on a plan to come out with infrastructure bonds… It is unlikely to happen in the current fiscal,” LIC Chairman T S Vijayan said.

While the size of the infrastructure bond is not yet known, sources say Life Insurance Corporation (LIC) could have issued bonds worth Rs 5,000 crore this fiscal.

The government, in 2010, had allowed LIC and few other finance companies to issue tax-free infrastructure bonds.

The bond issue, which is under Section 80CCF of the Income-Tax Act, enables an investor to avail a deduction of up to Rs 20,000 in the taxable income for the current financial year.

The Rs 20,000-deduction is over and above the Rs 1 lakh deduction, under Section 80CC of the Income Tax Act.

Last year, insurance regulator Insurance Regulatory and Development Authority (IRDA) had expressed concerns over insurance companies floating infra bonds over the quality of debt papers that these insurance companies would be investing in.

“As a regulator, we have certain concerns with regard to insurance companies issuing infrastructure bonds… I think there should be certain curbs on such issues by insurance companies. We are yet to look into this issue,” IRDA Chairman J Hari Narayan had said.

Besides, some companies have come out with such tax- saving long-term bond like Infrastructure Development Finance Company ( IDFC )) and Indian Infrastructure Finance Company Limited (IIFCL).

More Under Income Tax

Posted Under

Category : Income Tax (26782)
Type : News (13435)

Leave a Reply

Your email address will not be published. Required fields are marked *