Corporate Deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made.
Benefits of investing in Company Fixed Deposits. High interest.
Short-term deposits.
Lock-in period is only 6 months.
No Income Tax is deducted at source if the interest income is up to Rs 5,000 in one financial year
Investment can be spread in more than one company, so that interest from one company does not exceed Rs. 5, 54 EC Bonds
Capital Gain be saved Under Sec 54EC or Sec 54F, if the land or property sold is non agriculture. We deal in such bonds which qualify for Sec 54EC Bonds.
* Tax can be saved under Section 54 EC by investing in bonds.
* Tax can be saved under Section 54 F by investment in New residential house.
* Long Term Capital Asset Long term assets means any capital asset held by assessed for more than 3 Years.
* If assessed has sold the Long term capital asset during the previous year and made a long term capital gain then he can invest money of capital gain in Capital gain bonds and can save tax on long term capital gain.
* Assessed here means all type of assesses, like individual, firm company etc
* Amount to be invested in bonds is only capital gain not net consideration received on sale of long term capital asset.
* Amount exempted under this section will be amount of capital gain or amount invested in capital gain bond which ever is lower maximum up to 50Lakh(see note below).
* These Bonds Maturity Period is Three years.
* Capital gain bonds eligible under this section are now can be issued only by REC or NABARD.
* Bonds can not be pledged ,sold transfer before completion of three year from purchase of bonds ,and in case its transferred then amount capital gain exempted on investment in these bonds will be made taxable in that previous year as Long term capital gain.
*Amount of capital gain should be invested in Capital gain bond within 6 Month from date of transfer/sale of capital asset .
One more good news for you that 50 lakh Limit is for each financial year .As your six month limit is fall in two different Financial years so you can save 50 lakh in fy 2008-09 and 50 lakh in 2009-10.so one can save upto maximum of one crore of capital gain u/s 54EC.
Key Features :
New Section Introduced in Income Tax Act 2011: Section 80CCF was introduced in the Income Tax Act, 1961 in the budget of February 2010. As per this section investments made in notified infrastructure bonds are exempt from tax up to maximum of Rs 20,000 per year. Section 80CCF allows individuals to invest Rs. 20,000 in infrastructure bonds, and reduce this amount from taxable income. This exemption is in addition to the Rs. 100,000 deduction under section 80C (Investment in instruments like ELSS Mutual Funds, Life Insurance, Provident Fund etc).
Interest Income is Taxable: The interest income from infrastructure bond is taxable. The interest will be added to investors taxable income. This means even though the investment in these bonds is exempt from tax (maximum Rs 20,000). interest income is not. This means investment under section 80CCF is advisable only after the investor has completely exhausted Rs One Lakh investment under section 80C.
The funds raised through these bonds will be utilised towards "infrastructure lending" as defined by the RBI in the regulations issued by it from time to time, after meeting the expenditures of, and related to the issue. These infrastructure bond issues are part of the government's effort to mobilise money to part-fund the massive $1-trillion infrastructure spend it has planned for the Twelfth Plan.
Tax Benefits: Under section 80CCF of the Income Tax Act, Rs 20,000 per annum paid or deposited as subscription to long term infrastructure bonds shall be deducted in computing the taxable income. This is over and above Rs 1,00,000 tax benefit available under section 80C, 80CCC and 80CCD.
Pros: The limit of Rs 20,000 per annum is in addition to Sections 80C, 80CCC and 80CCD. Hence, it is advisable to consider applying in this issue.
Cons: The bonds are locked in for five years, so there is no exit in case you need the money midway which restricts liquidity.
A type of debt instrument that is not secured by physical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture.
Debentures have no collateral. Bond buyers generally purchase debentures based on the belief that the bond issuer is unlikely to default on the repayment. An example of a government debenture would be any government-issued Treasury bond (T-bond) or Treasury bill (T-bill). T-bonds and T-bills are generally considered risk free because governments, at worst, can print off more money or raise taxes to pay these type of debts
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