Section 80CCF

What is Section 80CCF?

80CCF is section of Income Tax Act proposed by Government of India in Union Budget 2010, in which individual can invest in Long Term Infrastructure Bond and get tax exemption of 20,000/- per financial year. This limit is above of 80C limit (1,00,000/-). The main purpose of introducing this section is promoting infrastructure development in country. These Infrastructure Bonds has assured rate of returns. Usually yield (interest on yearly basis) of these bonds are from 7.75 to 9.00 % per annum.

Below are few characteristics of such Infrastructure Bonds:

• Government declare Infrastructure Bonds as Long Term Infrastructure Bond eligible under this section.
• Infrastructure Bond have tenure of 10 to 15 years.
• Minimum locking period for Infrastructure Bond is 5 years.
• Individual can exist form these Infrastructure Bonds through secondary market / buy back option as specified by issuer after lock in period.

Long Term Infrastructure Bonds issued by the following agencies would qualify for tax benefit under section 80CCF.

• Industrial Finance Corporation of India (IFCI)
• Life Insurance Corporation of India (LIC)
• Infrastructure Development Finance Company (IDFC)
• Any non-banking finance company which has been classified as an infrastructure finance company by the Reserve Bank of India for example L & T etc.

Limit of Section 80CCF:

Current limit of section 80CCF is 20,000/-. Individual can take benefit of above Infrastructure Bonds up to 20,000/- per financial year. If total investment in such Infrastructure Bonds exceeds 20,000/- then only 20,000/- can be considered under this section.