The Government announced in early July that tax-saving infrastructure bonds providing income-tax relief under Section 80 CCF of the Income-tax Act would have a tenure of 10 years and a lock-in period of five years.
Individuals and Hindu Undivided Families (HUFs) will be able to claim tax relief on investments up to Rs 20,000 in these bonds over and above the deduction of Rs 1 lakh from annual income for the purpose of calculating taxable income under Section 80 C, of the Act.
Investments in “long-term infrastructure bonds” of the Industrial Finance Corporation of India, Life Insurance Corporation of India, Infrastructure Development Finance Company and non-banking finance companies classified as infrastructure finance firms by the Reserve Bank of India will be eligible for deduction up to Rs 20,000 under a new Section 80CCF introduced in the Finance Act 2010-11.
It will be mandatory for the subscriber to furnish a permanent account number (PAN) to the issuer for investment in the bonds.
The interest rates for thes bonds would vary according to the issuer and the market. Market experts are guessing it they would be between 7 per cent and 8 per cent.
The Government aims to spend $500 billion on infrastructure in the five years to March 2012, and double that amount in the subsequent five years.

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