Infrastructure bonds by LIC

Life Insurance Corporation of India is the oldest and most reliable life insurance companies in India. The leader in the life insurance segment in India LIC also offers a host of other products that apart from yielding benefits also help an individual from paying huge amounts of tax.

The infrastructure bonds issued by LIC are one of the most sought after products by the company. By investing in the Infrastructure bonds issued by LIC you can be exempted from paying tax under Section 80CC of the Income Tax Act.

Any individual can invest the Infrastructure bonds issued by the Life Insurance Corporation of India. The amount of cash invested can range from ` 5000 - ` 20,000. All brackets of tax payers benefit from investing in these bonds. If you fall under the category of highest tax payers that is 30% then you can save upto ` 6000 and in case you fall in the lowest tax bracket then also you save a minimum amount of ` 2000.

Apart from offering benefits to individuals these bonds are specially meant to boost the infrastructure projects in India.

Features of LIC Infrastructure Bond

• Tenure: 10 years
• Minimum lock in period: 5 years
• Interest Rate: 7.85%-7.95% after tax.
• Loan on Bond: After 5 years
• Options to exit: After completion of the lock in period the investor can return the bond to the issuer
• Open for Individual or HUF.
• Meant for Investors looking for Income and capital protection
• Ideal for tax planning
• Investments up to ` 20,000 per annum will be exempted from tax under section 80 CCF of the Income Tax Act.

Apart from offering capital safety the infrastructure bonds offered by LIC also offers fixed returns through ECS. These bonds are not like mutual funds which depend on market conditions instead these bonds assure you a fixed sum as returns. TermThe infrastructure bonds issued by LIC have a lock in period 5 years and maturity of 10years. Incase after the lock in period you want to return the bond then you can ask the issuer to purchase it back or you can also sell the bonds in the stock market.

Last updated On: 7^th May 2011

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