“The volume of issuance during the financial year shall be restricted to 25 per cent of the incremental infrastructure investments made by the issuer during 2010-11,” finance ministry said.
Besides, Industrial Finance Corporation of India (IFCI), Life Insurance Corporation (LIC), Infrastructure Development Finance Company (IDFC) and India Infrastructure Finance Company Ltd (IIFCL), non-banking financial companies (NBFCs) classified as infrastructure finance company by RBI will be able to issue tax-saving bonds.
It provides tax exemption on investments up to Rs 20,000 in long-term infrastructure bonds. This is over and above the existing tax saving limit of Rs 1 lakh.
The finance ministry further said infrastructure bonds should be of 10 years with minimum lock-in of 5 years. After expiry of 5 years, investors would have the option to either sell it in secondary market or seek redemption.
Published 20 September 2011, 14:21 IST