9% IDFC Infra Bond - Save TAX u/s 80 CCF (Rs. 20,000 in addition to the limit of Rs.1 Lakh u/s 80C)

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Dear Investor,

We are pleased to present you an investment opportunity in IDFC Long Term Infrastructure Bonds. Investments upto a maximum of Rs.20,000 is eligible for deduction u/s 80CCF of the Income Tax Act for the Financial Year 2011-12. An Individual or HUF can avail ofthis benefit in addition to the limit of Rs.1 Lakh u/s 80C. The other details of these bonds are as follows:

·         The bonds are issued at Face Value i.e.Rs.5,000 per bond and the minimum investment is Rs.10,000

·         The bonds carry a rating of “LAAA” (ICRA) with stable outlook and is the highest credit quality rating assigned by ICRA

·         The tax benefit would be limited to a maximum of Rs.20,000 although the investor can invest any amount

·         The benefit is available only in the year of investment i.e. if the provision prevails next year then the investor has to again invest  Rs.20,000 to gain deduction next year

·         The tenure of the bonds is 10 years. However, the lock-in period is 5 years if the investor chooses the buy-back option

·         In case the investor does not opt for buyback, the principal amount would be refunded back after 10 years

·         The bonds will be listed on BSE and NSE. It can be sold after a minimum holding period of 5 years

·         Bonds cannot be pledged or hypothecated for obtaining loans during the lock in period

Terms of Issue:

Series	1	2
Face Value	Rs 5,000  per bond
Minimum Investment	Two Bonds and in multiples of one Bond thereafter. For the purpose of fulfilling the requirement of minimum subscription of two Bonds, an Applicant may choose to apply for two Bonds of the same series or one-one Bond of different series
Interest payment	Annual	Cumulative
Interest  Rate	9.00% p.a.	N.A.
Maturity Amount per Bond	Rs. 5,000	Rs. 11,840
Maturity	10 years from the Deemed Date of Allotment
Yield on  Maturity	9.00%	9.00% compounded annually
Buyback Facility	Yes
Yield on Buyback	9.00%	9.00% compounded annually
Buyback Amount	Rs. 5000	Rs.7,695 per bond
Buyback Date	Date falling 5 years and 1 day from the Deemed Date of Allotment
Buyback Intimation Period	The period beginning not before nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date.

Benefit Illustrations:

Particulars	In case Rs.20,000 is not invested	In case Rs.20,000 is invested
Total income	1,000,000	1,000,000
Less: Investment	0	20,000
Taxable Income	1,000,000	980,000
Tax @30% assumed	300,000	294,000
Add: Education cess @3%	9000	8820
Total tax payable	309,000	302,820
Net Tax Saving		6,180

The issue opens on November 21^st, 2011 and closes on December 16^th, 2011. Kindly contact for the application forms.