What is the tax treatment of infrastructure bonds?

The government of India, in a bid to attract investors' money into the infrastructure sector, introduced section 80CCF of the Income-tax Act more than a decade back. This allowed an investor to seek tax relief on the investment amount up to Rs 20,000 per year by investing in specific Government approved infrastructure bonds. These bonds found prominence in Budget 2010 when they were introduced as an additional avenue to save taxes. However, what remains noteworthy is that the deduction for investment in infrastructure bonds was available only for a short period and was discontinued with effect from the financial year 2012-13.

This article was originally published on August 05, 2022.