Infrastructure Bonds

On top of the 1Lakh limit of 80c, Indian citizens can get an additional tax exemption of 20k if they invest in infrastructure bonds. Usually most public issue of infrastructure bonds provides abysmally low interest rates. However IFCI has come up with a private investment issue (which is open till 31st Aug ’10) http://www.ifciltd.com/Portals/0/IFCI%20Infra%20Bond%20Series%20I_IM_web.pdf

It has 4 different schemes with 5 year lock in and provides 7.85% to 7.95% p.a. interest for 10 years.

Note: Even though IFCI is a PSU, not so long ago it was on the verge of bankruptcy.