Tax-free infra bonds crowned at 25%

According to the finance ministry, any of the infrastructure finance group can deal out maximum of 25 percent of its inclining investment as tax-free infra bonds during a year.

As per a senior finance ministry official, the quantity of issuing of the same during this financial year shall be limited to a 25 percent of the incremental infrastructure reserves crafted by the subject throughout the fiscal year 2009-10.

This defines that if an infrastructure finance company if puts its Rs 70 crore in an infrastructure in FY09 and Rs 100 crore in FY10, then it may deliver bonds only value 25 percent of Rs 30 crore in FY11. If the same invest less or equivalent, then in that case no bonds can be issued.

As per the Infrastructure Development Finance Company executive director Vikram Limaye the purpose is to connection an IFC's height of action in the infrastructure arena with the quantity it strategy to hoist via bonds.

On Friday the government permit IFCI, LIC, IDFC, and non-banking finance groups categorized as IFCs to hand out tax-free infra bonds.