In 2010, the government introduced a new section 80CCF under the income tax act to provide for income tax deductions for subscription in long-term Infrastructure Bonds. These bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2011-12. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Power Finance Corporation has also come out with a similar bond issue.

Please note the following about subscribing to this bond issue:

1.  This bond is open only to Indian resident investors

2.  This bond is offered through Physical and Demat mode - an investor would need to have a demat account to apply in demat mode of this issue. However, please note that this demat account need not be a FundsIndia demat account.

3.  The bond is issued in units of Rs. 5000, and the minimum number of units to subscribe to is 1. Essentially, the minimum amount of investment is Rs. 5000.