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Tax saving bond 29.6.13

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Tax saving bond 29.6.13

  1. 1. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com TAX SAVING BONDS By Parvathi V
  2. 2. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com Introduction to Savings Bonds As the name suggests – Tax Saving Bonds – are instruments used for Individual Income Tax savings. They have not been as popular as some of the other Tax saving instruments, but are ideal for people who have low risk appetite and are looking to preserve their income in the longer run and also accrue benefit of tax savings.
  3. 3. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com Popular Tax Saving Bonds There are a few tax saving bonds available in the market which are issued by RBI and other commercial and private banks/finance institutions. Some of the popular tax saving bonds are 1. RBI Relief Bonds 2. IDFC Infrastructure Bonds 3. NHAI/REC Bonds
  4. 4. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com RBI Relief Bonds • As the name suggests, these bonds are issued by the RBI. Key highlights of this bond are: • Minimum investment is Rs. 1000. • Interest is compounded half-yearly. • Maturity period of the bond is 5 years. • Interest received is tax-free in your hands. • Advantage: • You can choose to receive interest half-yearly or at maturity. Half- yearly interest RBI relief bonds are an attractive option for investors looking for a regular and stable income
  5. 5. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com IDFC Infrastructure Bonds • Key highlights of the IDFC Infrastructure Bonds are: • Minimum investment is Rs. 10,000 with a face value of Rs. 5000 per bond. • Interest payments can be annual or cumulative at maturity. • Maturity period is 10 years and a minimum lock-in period of 5 years. • Some of the other popular infrastructure bonds are: • Infrastructure bonds issued by ICICI and other few private sector banks. • Recently, L&T Infrastructure Finance Company was looking to make a public issue of L&T Infra’s Long Term Infrastructure Bonds which will have the tax saving benefits u/s 80CCF of the Income Tax Act 1961. • LIC Infrastructure Bonds provide tax benefits which are similar to that of IDFC and L&T.
  6. 6. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com NHAI/REC Bonds • When we talk about NHAI and REC bonds, we are referring to the category of bonds that let you avail tax saving benefit u/s 54EC of the Income Tax Act 1961. Any capital gain that is a result of a transfer of a long term capital asset will not be charged tax, if the gains are invested in the NHAI or REC bonds. Many investors use these bonds as a safeguard from capital gains tax. Some highlights of these bonds are: • Annual Interest Payments • A maturity period of 3 years • Minimum investment of Rs. 10,000 • Tax benefit u/s 54EC
  7. 7. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com ADVANTAGE-TAX BENEFITS • In Union Budget 2010-2011, RBI introduced a new section 80CCF under the Income Tax Act, 1961 – to provide for income tax deductions for subscription to long-term infrastructure bonds. These long term infrastructure bonds offer an additional window of tax deduction of investments up to 20,000 for the financial year 2010-11 (which was again extended for this financial year). This deduction is over and above the 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Tax Saving Bonds are launched by RBI as well as public & private Enterprises. • If you invest in tax saving infrastructure bonds, you will be able to claim a tax relief on investment up to Rs. 20,000. This is in addition to the Rs. 1 lakh deduction from annual income available to you u/s 80C, 80CCC, 80CCD of the Income Tax Act 1961.
  8. 8. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com CONCLUSION • We hope that by now you have realized the potential of tax saving bonds as an effective way of reducing the tax impact on your finances. We believe that these tax saving bonds are no-nonsense, hassle free and stable instruments of investment.
  9. 9. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com THANK YOU
  10. 10. CHENNAI 3rd Floor, ‘Creative Enclave’, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com THANK YOU

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