Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. These bonds are highly secure, sovereign in nature with a AAA rating. Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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54EC Bonds are for investors looking to economise capital gain taxes. To avail the tax exemption, you need to invest in these bonds within 6 months of the date of the sale of the property. 54EC bonds are issued for a lock-in period of 5 years and are non-transferable at any point of time. accounting ethics and integrity standards NRI Investment in Bonds is a very popular and rewarding opportunity.

However, interest rates are subject to revision by the respective Companies/Government from time to time. 54EC Bonds are issued by PSU’s notified by the government ( REC , PFC , NHAI and IRFC). Capital gain bonds are safe, secure and offer a decent rate of interest. You can apply for the 54 EC bonds offline (Physical) and online. All categories of persons are eligible to avail exemption benefit under section 54EC of the Income Tax Act.

What is Section 54EC of the Income Tax Act?

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. Download Black by ClearTax App to file returns from your mobile phone. Investors need to make an investment in 54EC Bonds within 6 months from the date of the sale of their asset generating capital gains.

When should I invest in 54EC bonds?

54EC Bonds do not allow any tax exemptions on short term capital gains tax. 54EC Bonds involve tax exemptions on long-term capital gains for investors who have sold their properties. The investment should be made within six months from the date of sale. The investment for individual investors is capped at Fifty lakhs. For partnership businesses, each partner qualifies to invest Fifty lakhs. The 54ec capital gain bonds are tax exemption bonds, allow you to avoid paying tax on capital gains arising from selling property.

1. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department.
2. Schedule a call with an investment expert to get complete help regarding investment in 54EC Bonds in India.
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4. Selling capital assets triggers tax on profits as capital gains, but tax can be avoided.

The income earned from the long-term capital gains will be taxable from the year you obtained the loan. 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. In case of transfer / conversion, the amount of exemption claimed under section 54EC shall be deemed to be income under ‘Capital Gains’ as long term capital gain in the previous year in which the long term specified asset is transferred or converted. These are bond for capital gain tax exemption, and so individuals and HUFs can apply. If you want to invest in 54EC bonds, you need to do it within six months of selling the property.

54EC bonds are specific types of bonds issued by government-approved entities like the Power Finance Corporation Limited (PFC), Indian Railways Finance Corporation Limited (IRFC), and the Rural Electrification Corporation (REC). Selling capital assets triggers tax on profits as capital gains, but tax can be avoided. Section 54EC allows exemption by investing in specific bonds like NHAI, REC, PFC, or IRFC.

We tell you how to save on taxes on any long-term capital gain. A long-term capital gain is any revenue that you get from the sale of an asset. According to the Income Tax Act, you are liable to pay tax for such gains. However, you can reduce the liability of these taxes.Invest in section 54EC bonds, also commonly known as capital gain bonds, to avail tax deductions in the future. The bonds are issued as per the provisions of the section 54EC of the IT Act. They are bonds offered by Rural Electrification Corporation Ltd (REC), Power Finance Corporation Limited (PFCL) and National Highways Authority of India (NHAI), among others.