This site provides detail information on
Infrastructure Bonds India. The site also focuses on the current scenario of
Infrastructure Bonds market in India.
Majority of
investors claiming tax benefits under
Section 88 of the Income Tax Act avails conventional options of taking
insurance and
investing in Public Provident Fund and
National Savings Certificate.
A total sum of Rs 100,000 that can be claimed as
rebates, the aforementioned option account for only Rs 70,000, and the balance Rs 30,000 is reserved for
investments in infrastructure bonds amongst others. These
investments are in the form of
shares, bonds, debentures and are issued by
public financial institutions. These are subject to a
3-year lock-in period. Any
redemption prior to its maturity nullifies the
tax benefits claimed at the time of making the
investment. The
Infrastructure Bonds India by a leading
public financial institution, a few years back, offered coupon rate of 5.50% and 5.64%, respectively.
Inflation shoots up the
interest rates accordingly. The solution lies in balancing the two, i.e., the benefits of an
investment vehicle which offers assured yet modest returns coupled with
tax benefits on one hand and a high risk-high return proposition on the other.
Some notable points for
Infrastructure Bonds India are -
The investments in other products like mutual funds are market-linked and not assured and thus returns may not be repeated in the future.
A 3-year lock-in period in case of Infrastructure Bonds India offers reasonably good return and they are capable of delivering going forward.
The risks associated with mutual fund investment are much higher with respect to those in Infrastructure Bonds India.
Investors who are habituated to risk-free investment might be unwilling to venture into market-linked products.
Investments should be governed by investor's risk-appetite and not on the scale of returns.
The motive behind investing in Infrastructure Bonds India i.e. to save taxes, should not be so overbearing that it proves to be an infeasible proposition.
An investor with an appetite for risk can achieve two goals simultaneously, paying the taxes and investing in a well-diversified equity / balanced scheme.
Historical Inflation Rates | India Income Tax Returns
