It may be recalled that the Central Government, vide Notification No.48/2010/F.No. 149/84/2010-SO (TPL) dated July 09, 2010, has specified certain bonds as long term infrastructure bonds for the purposes of Section 80CCF of Income Tax Act, 1961 viz, bonds issued by Industrial Finance Corporation of India, Life Insurance Corporation, Infrastructure Development Finance Company and a Non-Banking Finance Company classified as an Infrastructure Finance Company by the Reserve Bank of India.

2. It is accordingly advised that amount raised by issue of infrastructure bonds by Infrastructure Finance Companies, as specified in the notification issued from time to time by the Central Government under Section 80CCF of the Income Tax Act, 1961, shall not be treated as 'public deposit' within the meaning of paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

3. Notification issued in this regard, DNBS (PD) Notification No.216 (US)/2010 dated October 22, 2010, amending the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, is enclosed.

 

Long-term infrastructure bond status excludes specified bond proceeds from being treated as public deposits under NBFC rules. Deduction for long-term infrastructure bonds is recognised for specified bonds issued by designated development finance institutions and infrastructure finance companies; amounts raised by those specified infrastructure bond issues shall not be treated as public deposits under the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, and a notification amends the NBFC directions accordingly.