IRFC Tax Free Bond Issue Details

Issuer	Indian Railway Finance Corporation Limited
Issue of Bonds	Secured, Redeemable, Non-Convertible bonds in the nature of debentures, having benefits under section 10(15)(iv)(h) of the Income Tax Act, 1961
Issue Size	Rs 3,000 crores with an option to retain oversubscription up to ` 6,300 crores (Shelf-limit)
Issue Open Date	27th January, 2012
Issue Closing Date	10th February, 2012
Face Value (Rs.)	Rs` 1,000 per Bond
Minimum Application	Rs 10000 (10 Bonds) & in multiples of ` 5000 (5 Bonds)
Tenor/Redemption Date	10 Years and 15 Years from the deemed date of allotment
Ratings	"CRISIL AAA/Stable" by CRISIL, "CARE AAA" by CARE & "ICRA AAA" by ICRA
Security	Charge on the movable assets comprising of rolling stock such as wagons, locomotives and coaches by way of first/ pari passu charge, present and future, as may be agreed between IRFC and the Trustee, pursuant to the terms of the Debenture Trust Deed
Trading	Compulsorily in dematerialized form
Issuance	In dematerialized form as well as physical form, at the option of Applicants.
Lead Managers	A. K. Capital Services Ltd., SBI Capital Markets Ltd. & ICICI Securities Ltd.
Depository	National Securities Depository Ltd. and Central Depository Services (India) Ltd
Trustee	Indian Bank
Allocation	Category I (QIB+ Corporate)- up to 45% Category II (Individual above 5 Lakhs)- up to 25% Category III (Individual below 5 Lakhs)- up to 30%
Listing	Proposed to be listed on BSE & NSE
Interest on Application Money used towards allotment of bonds	@ 8.00% p.a. on the amount for which Bonds are allotted to the Applicants subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of banking of the application (being the date of submission of each application as duly acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment
Interest on Application Money which is liable to be refunded	@ 4.00% p.a. on application money that is liable to be refunded to the Applicants in accordance with the provisions of the SEBI Debt Regulations, or other applicable statutory and/or regulatory requirements, subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, from the date of realization of the cheque(s)/ demand draft(s) or 3 (three) days from the date of receipt of the application (being the date of presentation of each application as acknowledged by the Bankers to the Issue) whichever is later, upto one day prior to the Deemed Date of Allotment. Provided that IRFC shall not be liable to pay any interest on monies liable to be refunded in case of (a) invalid applications or applications liable to be rejected, and/or (b) applications which are withdrawn by the applicant.

 The bonds will be listed on the BSE.

IRFC Tax Free Bonds and Bank Fixed Deposits

IRFC bonds score well for those in the highest tax bracket. So if you invest . 1 lakh in IRFC bonds, and are in the highest tax bracket, you will get an interest income of . 8,300 per annum for 15 years which is tax free. As against this, even if you earn a 9% interest on a bank fixed deposit and you are in the highest tax bracket (30.9%) you will earn an interest of Rs 9,000 per annum but will pay a tax of Rs 2,781, so the net interest you earn is only Rs 6,219, which is a yield of 6.22%

IRFC Tax Free Bonds and PPF

Tax-free interest of 8.3% is the highest available after PPF, and there is no upper ceiling on investment. Though PPF offers you an interest of 8.6%, it is subject to revision and the maximum amount you can invest is only Rs 1 lakh per annum.

Caution

Even though the bonds will be listed, one is not sure if there will be an active secondary market for these bonds. Hence, if you need the money in between, you may have no other way out.

How to Apply for IRFC Tax Free Bonds ?

Download IRFC Tax Free Bonds below and fill up, attach all the required documents and submit it to any of the collection centre below:

Collection canter near you

 

 

 

Options	I	II
Tenor	10 Years	15 Years
Face Value(Rs./Bond)	`1,000.00	`1,000.00
Minimum Application Size	` 10000 or 10 Bonds	` 10000 or 10 Bonds
In Multiples of	` 5000 or 5 Bonds	` 5000 or 5 Bonds
Coupon Rate (%)p.a.
Retail (Category III)	8.15%*	8.30%*
Others (Category I & II)	8.00%	8.10%
Interest Payment	Annually	Annually
Interest Payment Date	October 15, every year	October 15, every year
Redemption Date	10 Years from the Deemed Date of Allotment	15 Years from the Deemed Date of Allotment
Maturity Amount	Face Value + Interest Accrued at the Redemption Date	Face Value + Interest Accrued at the Redemption Date

 

Highlights of Tax Benefits

 

Ø       The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of IT Act.

 

Ø       There will be no deduction of tax at source from the interest, which accrues to the bondholders on these bonds irrespective of the amount of the interest or the status of the investors.

 

Ø       Wealth Tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. HDFC TaxSaver
2. ICICI Prudential Tax Plan
3. DSP BlackRock Tax Saver Fund
4. Birla Sun Life Tax Relief '96
5. Reliance Tax Saver (ELSS) Fund
6. IDFC Tax Advantage (ELSS) Fund
7. SBI Magnum Tax Gain Scheme 1993
8. Sundaram Tax Saver

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Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

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How to apply to IRFC Bonds?

Apply for IRFC Tax Free Bonds forms below

Download IRFC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

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How to apply to HUDCO Bonds?

Apply for HUDCO Tax Free Bonds forms below

Download HUDCO Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

 

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How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you