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Sunday, January 15, 2012

REC Long Term Infrastructure Bond-Series (2011-12), which carries benefit under Section 80CCF of the Income Tax Act, 1961, has opened from December 19, 2011 and will be open till February 10, 2012

Following are the salient features of the bonds:

REC Long Term Infrastructure Bonds (Series - 2011-12) Details:
Eligibility: Resident Indian Individuals and HUFs
Application Size: The lots for application would be 1 Bond and in multiples of 1 Bond thereafter.
Face Value: Rs.5,000/- per bond
Form: Demat / Physical Form. However, trading will be allowed only in Demat form after lock-in period
Security: Unsecured

Interest Rates and other details:

Particulars Option I Option II Option III Option IV
Face Value 5000 5000 5000 5000
Interest frequency Cumulative Annual Cumulative Annual
Duration 10 years 10 years 15 years 15yrs
Coupon Rate p.a. 8.95% 8.95% 9.15% 9.15%
Payment Compounded Annually Payable Annually Compounded Annually Ann.
Pymt
Buyback Amt. after 5 yrs Rs. 7,677.00 Rs. 5,000.00 NA NA
Buyback Amt. after 7 yrs NA NA Rs. 9,231.00 5000
Maturity Amt. after 10 yrs Rs. 11,783.00 Rs. 5,000.00 NA NA
Maturity Amt. after 15 yrs NA NA Rs. 18,592.00 5000

According to Section 80CCF of the Income Tax Act, 1961, in computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government

By investing in these bonds, investors can therefore, avail deduction under Section 80CCF of upto Rs.20,000/-, which will be over and above the prevailing deduction of Rs.100,000/- for investments made under Section 80C of the Income Tax Act, 1961



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