All you wanted to know about 54EC bonds

We shall Call/SMS you for a period of 12 months.Brokerage will not exceed SEBI prescribed limits Disclaimer  Privacy Policy Any Grievances related the aforesaid brokerage scheme will not be entertained on exchange platform. Trusted by over 2 Cr+ clients, Angel One is one of India’s leading retail full-service broking houses. We offer a wide range of innovative services, including online trading and investing, advisory, margin trading facility, algorithmic trading, smart orders, etc. Our Super App is a powerhouse of cutting-edge tools such as basket orders, GTT orders, SmartAPI, advanced charts and others that help you navigate capital markets like a pro. Do note that there is a cap on the capital gain that can be reinvested in a 54EC Bond, and the limit has a ceiling of Rs.50 lakh. Yes, the exemption under Section 54EC can be claimed multiple times related to the same property, subject to the overall limit of Rs.50 lakhs per financial year.

54EC Bonds or Capital Gains Bonds is one such instrument to consider and know about, which will get you an exemption from the capital gains tax that you might have incurred on a long term asset provided certain conditions are met. Most importantly the taxpayer will have to, within 6 months of sale or transfer, reinvest the proceeds from the sale of a long term asset into a 54EC bond. Investors can enjoy tax exemptions under section 54EC of the Income Tax by purchasing these bonds. However, interest earned through investment in these bonds is taxable as per your income tax slab. However, you will not be able to get the tax exemption benefits under section 54EC.

C Bonds: A Guide to Capital Gains Tax Exemption

1. The taxpayer must invest the capital gains or the net consideration, whichever is lower, in Section 54EC bonds within six months from the original asset’s sale date.
2. These bonds carry interest, which is currently at 5 per cent and is taxable.
3. Our experts suggest the best funds and you can get high returns by investing directly or through SIP.
4. Yes, NRIs can claim the exemption the exemption under section 54EC of the Income Tax Act.
5. If you have any doubts or queries and want specialized advice from experts at SBNRI, contact us using the button below.

The taxpayer will have to pay tax on the capital gains accordingly. Any individuals, including Non-Resident Indians, and HUFs can apply for these bonds to get capital gains tax exemption. present discounted value · economics However, you need to buy these bonds within six months of selling property. NRIs can buy capital gains bonds issued by the National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC), etc. to save tax on their long-term capital gains from the sale of their property in India.

What are the Key Features of Capital Gains Bonds Under Section 54EC?

It important to noted here that in case the assessee has taken any loan or advances against the long term specified asset, then, the same would be deemed as converted into money on the date on which such loan or advances is taken. As shown in example, assessee has tried to take double benefit of section 54EC by investing the amount in two different financial years but within six month after the date of transfer. But this planning is nullified by the Second Proviso u/s 54EC. BondsIndia is a brand name of Launchpad Fintech Private Limited, an e-business platform for Fixed Income securities that uses technology as a means to provide quality & real-time financial solutions to users. As per the Finance Act (no.2) 2014 amendment, you can’t invest more than Rs. 50 lakh in the capital bonds under Section 54EC. You 14 things you should know about time deposits in the philippines can consider investing under section 54F or 54 to invest more than Rs. 50,00,000.

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Hence the break-even rate for ₹40 lakh to outperform ₹50 lakh over five years, at 3.5 per cent net of tax, is 8.24 per cent net of tax. Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP.

Tax implications include exemptions on long-term gains and taxable interest income. These bonds are suitable for tax-saving and conservative investors seeking safety. According to Section 54EC of the Income Tax Act of 1961, investors can shield their long-term capital gains from taxation by investing in specific 54EC Bonds within six months of selling assets like property or stocks. These bonds, issued by government-backed infrastructure companies, carry a lower risk profile, earning them AAA ratings from credit rating agencies like CRISIL, ICRA, and CARE.

If you have received capital gain from selling a property, you can invest in these bonds to avoid paying capital gain tax. Selling your capital assets for a generous amount of profit is surely a moment of joy, but it also comes with capital gains taxes. However, there are various ways to avoid this tax or minimize your capital gains tax liability. One such way is to invest your capital gains in capital gains bonds specified under section 54EC of the Income Tax Act. This guide will cover all that you need to know about capital gains bonds under section 54EC of the Income Tax Act. Efiling Income Tax Returns(ITR) is made easy with Clear platform.

The interest rate and policy with respect of 54EC bonds are subject to change from time to time, depending on government regulations and changing economic conditions. Investors are advised to keep themselves informed through the Notices periodically made available by PFC, IRFC, and REC. CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps days sales of inventory CAs, tax experts & business to manage returns & invoices in an easy manner.