IIFCL Tax Free bonds 2012-13 review

After REC and PFC tax free bonds, its now the turn of India Infrastructure Finance Company Limited to come up with similar bonds. These bonds are very similar to those issued by REC and PFC but very interestingly, unlike REC and PFC, these bonds also have a 20 year option. Following are the details of this issue.

Face Value: Rs. 1000

Issue Price: Rs. 1000

Nature of Bonds: Secured

Minimum Application: Rs. 5000
Issue Opens on 26th December 2012
Issue Closes on 11th January 2013

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Duration	10 years	15 years	20 years
Frequency of Interest Payment	Annual	Annual	Annual
Coupon Rate	7.19%	7.36%	7.40%
Coupon Rate for Retail Individual Investors (less than 10 lakhs)	7.69%	7.86%	7.90%

 

The income by way of interest on these Bonds is fully exempt from Income Tax as per provisions under section 10 (15) (iv) (h) of IT Act.

These bonds certainly do present a good investing opportunity for those in 295 and 30% tax bracket, as the interest income from these is tax free and definitely a better bet than investing in bank FDs.

Take care and good luck!