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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Sec.80CCF: Saving Rs.6180/- tax by investing Rs.20,000/-

Posted by Muthu on February 18, 2011

Section 80C – everyone is aware. Section 80D- Health insurance – most of us are aware.

What you are not aware is Sec.80CCF.

As per this section, you can save upto Rs.20,000 in infrastructure bonds and claim a tax exemption of Rs.6180/- (assuming you are in the 30% tax slab).

The yield to maturity on cumulative option is 8.3% per annum.

If you reduce the tax saved from the amount invested, the yield would work out in double digit returns, making it very attractive for investors.

Government is channelizing this money for developing country’s infrastructure. So in addition to tax savings and good returns, you are also funding the country’s infrastructure growth. You are entitled to feel good about it!

Please note that even if you want you cannot invest more than Rs.20,000 for the purposes of claiming tax benefits.

Demat account is NOT compulsory for buying such bonds.

If you are interested in investing in bonds under Sec.80CCF, please let us know.

One Response to “Sec.80CCF: Saving Rs.6180/- tax by investing Rs.20,000/-”

  1. Ashish said


    I have never understood why we reduce the tax from amount invested to find the total yield.
    I think we should probably add this amount saved (6180) to the interest (for one year) to find the total return on the amount invested (20000 in this case).

    Could you please explain this? I will be very thankful.


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