There a lot of companies trying to raise funds through the Tax free bonds route before the Financial Year ends. The latest to join is India Infrastructure Finance Company (IIFCL), another Government-controlled company, issuing tranche 2 of tax-free bonds between February 25 and March 15.
As for most tax free bonds, these are good for investors in high income tax bracket of 20% and 30%. As for most tax free bonds, these are good for investors in high income tax bracket of 20% and 30%. Today the maximum rate offered by bank fixed deposit is 9%. This translates into a post tax return of 7.2% for 20% tax slab and 6.2% for 30% tax slab. This is lower than IIFCL’s 15-year and 20-year bonds.
Along with the above, it suits investors who want regular income from interest payment and have low risk profile.
About IIFCL:
IIFCL is among the major financiers to various infrastructure projects in the country. As on March 2012, it had disbursed loans of Rs 22,543 crore.
The company has been consistently profitable since its establishment in 2006, and its consolidated profit in FY-12 doubled over the previous year to Rs 678 crore. It did not have any non-performing advances in FY-12.
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