LIC Infrastructure Bonds

March 22, 2021

LIC Infrastructure Bonds:

If you are a taxpayer then you can save more tax by investing in LIC Infrastructure Bonds. Additional Rs.20,000 Tax Exemption under Section 80CCF.

LIC Infrastructure Bond at Glance:

Term: 10 years
Minimum lock-in period: 5 years
Loan on Bond: After 5 years
Interest Rate: 7.85%-7.95% after tax.
Exit options: Buyback or through Demat account
Open for Individual or HUF.

Any individual or HUF can invest in LIC’s Infrastructure Bonds Between Rs.5000 – Rs.20,000/- This will be over the Rs.1 lakh deduction allowed under Section 80C.

Tax Benefit example:
If you are in the highest taxpayers bracket of 30% can save an additional Rs 6,000 and if you happen to fall in the lower tax bracket then you can still save Rs.2,000/- by investing in LIC infrastructure bonds this financial year.

LIC infrastructure bonds not only offer capital safety but also offers fixed returns through ECS.

Term:
The infrastructure bonds will have a maturity of 10 years and a lock-in period of 5 years.

After the lock-in period is over, you can ask the issuer (LIC) to buy back bonds Or you can trade these bonds in the stock Exchange.

You should have a Demat account to invest in infrastructure bonds but it’s optional. You can get the infra bond in physical form too.

Apart from LIC, Infrastructure bond is also offered by following companies:
Industrial Finance Corporation of India (IFCI),
Infrastructure Development Finance Company (IDFC) IDFC Infrastructure bond and
Non-Banking Finance Company (NBFCs) who are classified as an infrastructure finance company by the Reserve Bank of India (RBI)
Life Insurance Corporation of India (LIC)