Is it advisable to buy IDFC Infra Bonds for tax saving??

POSTED BY Mohan Kishor ON March 5, 2011 4:55 pm COMMENTS (2)

Hi everybody,

please give some info on IDFC Infra bonds. I dont know anything about these bonds. My purpose is.. my section 80C limit is completed. So I want to invest another 20K in these bonds for tax saving. But is it a wise investment or trap in the name of tax saving. please comment.

in some site I was reading review that the tax adjusted returns from these bonds will be 14% approx p.a. Otherwise is it better to invest in some other Equity Diversified MF like HDFC top 200 etc.. keeping in view only the comparative rate of returns.

if investing in these bonds is correct, then with or without buy back? What is buy back?

2 replies on this article “Is it advisable to buy IDFC Infra Bonds for tax saving??”

  1. ashish9750 says:

    dear mohan,
    regarding idfc infra bonds, your 80c is completed and further u want to invest 20000, look merits in infra bonds are u can save tax upto 6000 if u r under 30 % tax bracket, and another is fixed return irrespective to market condition just like fixed diposits.and if u seeing return more than 15 % in investment so u can choose mutual funds or share trading for long term.
    ……ashish gupta

  2. Mohan

    I like the question , Note that a lot of madness is going on regarding this bonds , If you are in 30% bracket , it still make some sense , but suppose you are in 10% bracket , how muchj will you save ? 2000 bucks in tax ? And that will come with the cost of locking your money for next 5-10 yrs ! .

    Instead why not have the freedom to use the money in some products which offer you enough liquidity and you can move it to some other thing if a better oppotunity arises

    What about this ,. invest everything in debt funds or liquid funds , and wait for next crash in 2-3 yeays . and then put all the money in it in one go and then wait again for few years , ofcourse you need to have some guts for it . just a thought ,

    True way of looking at any investment is to look at REAL RETURN , which is after inflation and tax are adjusted . look at that number

    Manish

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