Bonds Under Section 54ec

What if you don t invest in 54.

Bonds under section 54ec. Provisions of section 54ec as per provisions of income tax act 1961 any long term capital gains arising from transfer of any capital asset would be exempt from tax under section 54ec of the act if. Specified bond for section 54ec of income tax act 1961 the benefit under section 54ec can be availed only if there is an income from a capital asset being long term in nature. Provisions of section 54ec provide exemption towards long term capital gain arisen on the transfer of land or building or both when the amount is invested into the specified bonds.

Know everything about 54ec bonds at karvy corporate. As per the provisions outlined under section 54ec the maximum amount of investment that an assessee can make in long term specified assets or bonds mentioned under section 54ec cannot be more than rs 50 lakhs over the duration of a financial year. 54ec bonds or capital gains bonds can be described as financial instruments which entail tax exemptions under section 54ec to an investor.

Income tax has to be paid on the interest accrued however as per the tax slab of the individual. An individual can invest in these bonds after receiving capital gains from selling a property thus availing the necessary tax exemption. 54ec bonds do not allow any tax exemption on short term capital gains tax.

The maximum limit for investing in 54ec. 54ec bonds are specifically meant for investors earning long term capital gains and would like tax exemption on these gains. Maximum investment required rs 50 lakhs in financial year rs 50 lakhs in financial year.

The key features of these bonds are. Tax deduction is available under section 54ec of the income tax act. The lock in period of section 54ec capital gain bonds has increased from 3 years to 5 years.

These bonds give an interest rate of 6. Eligible bonds under section 54 ec interest earned 5 75 5 75. The eligible bonds under section 54ec include bonds on offer by rural electrification corporation ltd rec and national highways authority of india nhai.