LIC may not issue infra bonds

The Life Insurance Corporation , or LIC, may not be able to issue tax-saving infrastructure bonds aggregating Rs 5,000 crore to retail investors this fiscal due to a regulatory glitch , which was discovered after India’s largest investment institution was named an issuer of these bonds by the income-tax department.

Also read :  Income Tax rates & Rebates available

Insurance regulations allow life insurers to raise funds only for promoting their core business. So, logically, life insurance companies cannot raise money for any other activity.

This is over and above the Rs1-lakh tax deduction available on other savings schemes such as the public provident fund and equity-linked savings schemes.

According to officials in a couple of merchant banks, quite a few issues need to be clarified by LIC.   Unlike IDFC or IFCI, LIC is not a term-lending institution. Its core mandate is to garner money for life insurance business.

Also read : Save Income Tax with Health Insurance

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s