Under Section 54 EC of Income Tax, 1961 an investor need not pay any tax on any long-term capital gains arising on sale of any asset, if the amounts of capital gains are invested in certain specified bonds i.e., 54 EC Bonds.
Capital Gain Bonds (54EC Bonds)
The Key features of Capital Gains Bonds are listed below:
| Issue Details | On-going |
| Tenure | 5 years |
| Rate of Interest | 5.00% p.a. payable annually |
| Taxation | Interest is taxable although no TDS is deducted |
| Redemption | Automatic Redemption after 5 Years |
| Rating | AAA rated |
| Mode of Holding | Physical or Demat |
| Min Investment | 1 Bonds (Rs. 10,000) |
| Max Investment | 500 Bonds (Rs. 50,00,000 Lacs) |
Capital Gains Bonds are issued by the below Government Organisations:
| Bonds | Issue Details | Coupon | Rating | Tax Benefit | Tenure |
| Rural Electrification Corporation | On-Going | 5.00% p.a. | AAA Rating | Taxable Bonds with benefits under Section 54 EC of Income Tax Act, 1961 | 5 Years |
| National Highway Authority of India | On-Going | 5.00% p.a. | AAA Rating | 5 Years | |
| Power Finance Corporation | On-Going | 5.00% p.a. | AAA Rating | 5 Years | |
| Indian Railways Finance Corporation | On-Going | 5.00% p.a. | AAA Rating | 5 Years |
We provide services to our clients for investing in these bonds and save them from the burden of tax.