Bonds – Pruassets

Bonds

Profit earned from the sale of long-term immovable assets such as land, buildings, or both is taxable under capital gains. However, taxpayers can reduce or avoid this tax liability by claiming an exemption under Section 54EC of the Income Tax Act. This section allows you to invest the capital gains in specified bonds notified by the central government within 6 months from the date of sale. These are known as capital gains bonds or 54EC bonds, and investing in them is a popular strategy to save tax on gains from the sale of immovable property.

The exemption under Section 54EC can be claimed by any taxpayer, including individuals, Hindu Undivided Families (HUFs), companies, LLPs, firms, and others.
The asset being sold should be a Long Term Capital Asset, which includes land or building or both. The asset is considered long-term if the taxpayer has held it for a minimum of 24 months prior to the sale.
The taxpayer must invest the Capital Gains within 6 months from the date of transfer.

Tenure: 5 Years

Investment: 1 Bonds (Rs. 10,000) Max Investment : 500 Bonds (Rs. 50 Lakhs)
Mode of Holding: Physical or Demat
Rate of Interest: @ 5.25% payable annually ( Taxable )
Safety & Security: AAA Rated
Redemption: Automatic Redemption after 5 Years

Bonds Eligible for Exemption Under Section 54EC of the Income Tax Act

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