India Infrastructure Finance Company Limited (IIFCL) will open its public issue of Tax Free Bonds of the face-value of 1,000 each in the nature of secured, redeemable, non-convertible bonds, having benefits under section 10(15)(iv)(h) of the Income Tax Act, 1961, aggregating up to a total of Rs. 1,500 Crores with an option to retain an over subscription upto the shelf limit (i.e. 9,251 Crores ) (CBDT notification authorises IIFCL to issue Bonds for an amount aggregating to 10,000 Crores during FY13. IIFCL has already raised 785 crores on private placement basis).
The issue has 3 investment options - 7.69% p.a. (10 Yrs), 7.86% p.a. (15 Yrs) & 7.90% p.a. (20 Yrs) for investments up to and including 10 Lakhs and 7.19% p.a. (10 Yrs), 7.36% p.a. (15 Yrs) & 7.40% p.a. (20 Yrs) for investments above 10 Lakhs.
The issue starts on December 26, 2012. Allotment will be on a first come first serve basis across all categories and has been rated "[ICRA] AAA (Stable)" by ICRA, "BWR AAA (Stable)" by Brickwork, "CARE AAA" by CARE.
Note: In case of tax-free bonds the interest earned on the invested amount is exempted from income tax. These are different from tax-saving bonds in which the invested amount is allowed for deduction from the total taxable income.
For further details check out the following link: IIFCL Tax Free Bonds