Section 80CCF of Income Tax Act

Recently came across one Infrastructure Bond which claimed tax benefits from a new IT section 80CCF. This was the first time I heard this section and hence this post. 80CCF is a new IT section added in the financial year 2010-11 which allows deduction in respect of subscription to long-term infrastructure bonds.


Below is the information I got from Indian Income tax site. 

The following section 80CCF shall be inserted after section 80CCE by the Finance Act, 2010, w.e.f. 1-4-2011 :

Deduction in respect of subscription to long-term infrastructure bonds.

80CCF.  In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.


The Central Government have specified bonds to be issued by:

1. Industrial Finance Corporation of India
2. Life Insurance Corporation of India
3. Infrastructure Development Finance Company Limited
4. a Non-Banking Finance Company classified as an infrastructure finance company by the Reserve Bank of India; as “Long-term Infrastructure Bond” for the purpose of section 80CCF of the Income Tax Act, 1961.

The good news is that, this deduction under 80CCF of IT Act is over and above the existing overall limit of tax deduction on savings of up to Rs.1 lakh under section 80C, 80CCC and 80CCD of the Act. This means we can save tax of amounts Rs. 2000(for those in 10% tax bracket), Rs.4000(for those in 20% tax bracket) and Rs.6000(for those in 30% tax bracket) above the already existing Section 80Cxxx limits. Though I am not an expert, I would still say this is a good move by Finance Ministry to encourage investors to participate in Infrastructure growth of our country.