Close on the heels of the IDFC Infrastructure bonds – L&T is also issuing infrastructure bonds beginning October 15th 2010, and closing on November 2 2010.
L&T Bonds: Tax Saving Infrastructure Bonds
These are classified as infrastructure bonds under Section 80 CCF which means that investing in them will reduce your taxable income by Rs. 20,000.
This increases your effective yield because along with the interest you earn on these infrastructure bonds, you save on tax as well.
These bonds are good for a maximum of Rs. 20,000 as far as the tax saving aspect is concerned, so if you buy bonds worth Rs. 30,000 and nothing else, even then the maximum you can reduce from your taxable income is Rs. 20,000 because that is the cap on tax benefits on infrastructure bonds.
L&T Infrastructure Bonds Features
There are 4 series of L&T Bonds, and though these bonds have a term of 10 years, there is an option of a buyback after 5 years or 7 years.
The interest rates, and effective yields of different plans are shown below:
| Series | Tax Bracket | 1 | 2 | 3 | 4 |
| Face Value | —- | Rs. 1,000 | Rs. 1,000 | Rs. 1,000 | Rs. 1,000 |
| Interest Payment | —- | Annual | Cumulative | Annual | Cumulative |
| Interest Rate | —- | 7.75% | 7.75% | 7.50% | 7.50% |
| Maturity | —- | 10 years | 10 years | 10 years | 10 years |
| Buyback in years | —- | 7 years | 7 years | 5 years | 5 years |
| Yield on Buyback | 30.9% | 15.23% | 13.59% | 17.20% | 15.75% |
| 20.6% | 12.31% | 11.36% | 13.42% | 12.58% | |
| 10.3% | 9.86% | 9.44% | 10.23% | 9.86% |
L&T Bonds Minimum Investment
The minimum investment needed for you to invest in these bonds is Rs. 5,000 because you have to apply for a minimum of 5 bonds, and the face value of each bond is Rs. 1,000.
Open and Close Date
Subscription opened on October 15th, and will close on November 2nd 2010.
Credit Rating
The L&T bonds have been rated CARE AA+ by CARE and LAA+ by ICRA which indicate high credit quality and that the rated instruments carry low credit risk.
How can you invest in the L&T Infrastructure bonds?
You can invest in these bonds either in the physical form or electronically through brokers like ICICI Direct. You can buy a form through one of the several agents across the country and invest in it through them as well.
Here is a list of banks listed on their website that can give you more information as well:
- Axis Bank
- DBS Bank
- HDFC Bank
- HSBC Bank
- ICICI Bank
- IDBI Bank
- ING Bank
- SBI Bank
They also have this cool link on their special website for this bond where you can enter in your contact details and they will contact you and help you.
If any of you do decide to contact them then I am really interested to know your feedback because I tried to get in touch with the numbers given in the IDFC website, and tried at least 10 times to no avail. I’d like to know if this is any better.
Tax on interest earned from the L&T Infrastructure bond
The interest itself is not tax free. It’s only the Rs. 20,000 you get reduced from your taxable salary that helps save tax.
L&T Infrastructure bonds to list on NSE after 5 years
The Bonds are proposed to be listed on NSE, and can be traded after the initial 5 years lock-in period. After this lock-in period, the holders can also pledge the Bonds with banks for availing financial assistance.
You don’t need a demat account to invest in these bonds
L&T will offer you the option to hold the Bonds either in Dematerialized or Physical Certificate form.
NRIs can’t apply in the L&T Bonds
Non-resident investors including NRIs, FIIs and OCBs are not eligible to participate in the Issue.
Conclusion
These were some salient features of the L&T bond issue, and I hope you found this useful in order to make a decision on whether you want to opt for them or not. Keep in mind that IDFC has a similar issue running, and if you have already applied for that then you won’t get any additional tax benefit (over Rs. 20,000) by applying for this issue as well.
If you have any questions, leave a comment, and the community here will try to answer them for you.
DEAR SIR
I PURCHASED 20 L& T INFRASTRUCTURE BONDS IN 2010 VIDE FOLIO NO. 00325325 CERTIFICATE NO. 418607 DISTINCTIVE NO. 1646406 TO 1646425. SINCE 5 YEARS HAVE BEEN OVER, PL LET ME KNOW HOW TO EN-CASH TO ABOVE BONDS.
YOU ARE REQUESTED TO EN CASH THE ABOVE BONDS WITH INTEREST UP TO DATE AND CREDIT THE MATURITY VALUE IN TO MY SAVING BANK A/C NO. 680501010010202 IFSC CODE;VIJB0006805 HELD WITH VIJAYA BANK AT THE EARLIEST.
AN EARLY ACTION WILL BE HIGHLY APPRECIATED.
WITH REGARDS
(SUBHASH CHAND SINGHAL)
17 DEC 2015 MOB NO. 9313233457
The bond of L&T infrastructure finance company limited 2010A series this bond is compulsory in demat form or hold in physical form also ?
R/Sir I am the holder of L&T Infrastructure Finance Com Ltd. security bond ISIN No. 69I07190, SR-4 7.5 BD 02DC 20 FVRS 1000 which were matured on 02 Dec 2015. Now please suggest me what is the next procedure to get my maturity amount . I dont want to reinvest this amount as I am widow, and having financial problem.
I had purchased L & T infrastructure bonds/debenture certificate on December 2,2010 with 5 years lock in period but the amount is not credited to my bank account. Now I want to get the amount back. Is it compulsory to open Demat account for that.Please let me know the procedure to get the amount back.
Regards
I had purchased L & T infrastructure bonds/debenture certificates on December 2,2010 with 5 years lock-in period but the amount is not credited in my bank account. Now I want to get the amount. Please tell me the procedure for further action.
Regards
On 04.12.2015 has have sold 20 infra bonds (2010) after completing 5 years lock in period but as per trade details received by DP interest not calculated and also I have never received any interest in last five years. Please check and revert.
I had purchased L&T long term bonds on December 2,2010.with 5 year lock in period but mature amount has not been credited in my bank account what is procedure for further action
Regards
I have taken L&T Infrastructure Finance Company Limited Tax Savigs Bonds 20 Nos. on 13.11.2010 vide application No. 4 2673079 from Integrated Enterprises (India) Ltd., in demat mode. It is matured. But, I didn’t received the amount. Kindly make me the payment at an early date.
Thanking you,
S,V,S,R,K, PRASAD.
Hi,
I took L&T bonds in Feb 2012 worth 20,000/-
but I have not yet received any Bonds or so..
How do I treck or take update on my investments.
regards,
Prasad
I have purchese a l & t infs. Bond. Since 2010. But unfortunet my bond is missing and i could not any satus till date. So please what is the procesidior for duplicate bond issue?
I have invested L&T Infra bond on Dec 2011. But till now i haven’t got the bond. Recently they have communicated interest payment letter to my address. I have closed my bank. can anyone tell me what is the procedure to get the interest?
i had purchased L&T infra bond on Nov 2010 for 20k, under 5 yrs buy back period with interest rate of 7.5% cumulative ( series 4), when can i sell it, what is the procedure, and i had got as physical bond. how much amount will i get and how much will be taxable
i have invested l&t infra bond .reference no 108616.now i want to change my new address .please tell what the procedure.
My DP. I’d is 301313 My claint ID Is207999112
Dear sir, I had invested rs40000 in infra structure bonds on 2010 November and it matured in 02/12/2014 . I had enqired and the IEP INDIA said it will be automatically credited to my a/c.but till date amount is not credited by company.my bonds are in IEP INDIA de mateA/c.pl.guide me how to get back my account
I purchased a L & T Infrabond on 27.01 2012 by cheque no of 837120 of ICICI bank. It is stolen from my flat.Plz let me know the no of the bond or any no from where I can confirm.
mukul
9230509139
I want to know the status of my L&T Infra Bond. Invested in 2010.
My Regd. Folio No.00205354 Certificate No.411656
Pl. reply to email
Dear Sir,
Reg:L&T infrastructure Company Ltd.Bond Issue-2010.Application No.32606510.
Invested 20000/ in the above bond issue during 2010-11, Cheque cleared,but not yet received any communication despite lapse of 3 years.
Kindly advise me the present status on the above mail & oblige.
other details are as under.
DPID IN 301774
CLID 1005137
HOPING FOR A RESPONSE IN THE MATTER PLEASE.
REGARDS
RAKESH KUMAR GUPTA
246/1 SHASTRI NAGAR
MEERUT 250001
I HAVE PURCHASED l & T BONDS EXEMPTEDSEC.80CCA) (SR 17.75BDO 2 DC 20 INE 691107166. during 2010-11. I want to have copy of the bond.When it will be matured pl.let me know.
Dear Sir,
I have purchased the L&T Infrastructure Bond by paying Rs 20,000 ( CENTRAL BANK Cheque No: 367676, Dt: 15.02.2011) , which got cleared from my Bank Account in 3 days. Then I have received one letter from L&T mentioned UB-10952298.
Also, i haven’t received the Soft / Hard (Original) Copy of the Infrastructure Bond till date.
Kindly let me know, what i need to do, to get both “Soft / Hard copy”?…
Please help me…..