Infrastructure Bonds

Contribute towards India’s growth by investing in Infrastructure Bonds.


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An Infrastructure bond is typically issued by governments, companies financing infrastructure projects, etc. for raising funds to be utilised for the development of infrastructure of a country.

The Government as well as the government authorised infrastructure projects borrow funds for operation of infrastructure projects and its development. Such bonds are known as Infrastructure bonds. Infrastructure funds offer a modest rate of interest and tax benefits. The government announces a list of infrastructure bonds from time to time. Section 80 CCF of the Income Tax Act offers tax deduction when you invest in these infrastructure bonds.

Most of the infrastructure development projects are operated under the guidance of the government. But, there are many instances wherein certain worthwhile infrastructure projects haven’t been undertaken due to the scarcity of funds. This is when the Indian government issues bonds for mobilising funds for these projects.

Investing in Infrastructure Bonds

Eligibility Criteria

Eligibility Criteria

• You should be an Indian national or a HUF • You should be above 18 years of age to invest in Infrastructure bonds. • Each individual is permitted to submit just one application since multiple applications could be combined based on the PAN • Allows tax benefits on investments up to Rs.20,000. You can however, hold the bonds in a dematerialized or a physical form. • The minimum amount of Rs.5,000 can be invested in infrastructure bonds. • You are eligible to trade with these infrastructure bonds only post completion of the lock-in period of 5 years.



• If you belong to a fixed income category, the best investment avenue would be tax saving infra bonds . • These infrastructure bonds are long-term secure bonds that usually matures in 10-15 years. • You automatically enhance the growth of India’s infrastructure by investing in such bonds • With a usual lock-in period of 3 years, you can receive decent returns by contributing towards India’s infrastructural growth. • There are certain firms that offer you free insurance as an additional benefit if you purchase infrastructure bonds from them

Step-by-step procedure to apply for Infrastructure bonds

  • In case you have a Demat account, you can apply online for investing in an infrastructure bond, All you need to do is duly fill up the online Infrastructure bond application form.
  • It is essential to have a PAN as well as a demat account for trading in infrastructure bonds.
  • In case you do not have a demat account, you can also apply for these infrastructure bonds in the physical form. You need a self-attested PAN card, identity proof as well as an address proof as part of the KYC (Know Your Customer).
  • Such bonds mature on completion of 10 years with a lock in period of 5 years.
  • You can also trade on such bonds on stock exchanges

  • The interest that you earn on an infrastructure bond would be taxable.

Some of the frequently asked questions on Infrastructure Bonds

  • Exit option: It is important to keep in mind that you aren’t permitted to break these bonds prior to 5 years and therefore you need to align them with your long-term financial goals.
  • Returns vs. inflation: If the interest rate is offered above the inflation rate, the investment done in bonds is beneficial.


No, the interest that you receive by investing in an infrastructure bonds aren’t tax free and you will be liable for paying tax on the interest that you receive. The interest amount is added to the income and taxed according to the tax bracket of the investor.

The lock-in period for investing in an infrastructure bond is 5 years and the maturity is 10 years.

No, you cannot pledge these bonds in the first 5 years, post which you can avail a loan facility by pledging your infrastructure bonds.

Infrastructure Bonds

Contribute towards India’s infrastructural growth by investing in Infrastructure Bonds.

An Infrastructure bond is typically funded by governments, companies financing infrastructure projects, etc. for raising funds to be utilized for the development of infrastructure of a country. 

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