What are 54EC capital gain bonds?

54 EC Capital Gain Bonds provide capital gain tax exemption to the investors, under section 54EC of Income Tax Act 1961. The long-term capital gain arises from sale of immovable property can be saved by investing in these Bonds within 6 months of sale. The maximum limit for investing in 54EC bonds is Rs. 50,00,000 in a financial year, and offers 5.00% Interest which is payable annually. The Interest that is earned on these bonds is liable to Income Tax. These bonds come with zero risks of repayment and interest as they are guaranteed by Government of India. Your annual income from interest earned on these bonds is guaranteed by the Government of India.

Issuer Minimum Investment ROI Rating Interest Credit Date Invest Online Download Form (To Invest Offline)
REC 20,000/- 5.00% p.a. AAA 30th June
IRFC 20,000/- 5.00% p.a. AAA 15th October
PFC 20,000/- 5.00% p.a. AAA 31st July

Why to Invest in 54EC Capital Gain Bonds?

To avail the tax exemption on capital gains.
The investment in capital gain bonds must be done within 6 months of capital gains.

Who are eligible to invest in these bonds?

Person (all categories) who have earned capital gain over the sell of immovable property.

Key Features of 54EC Capital Gain Bonds

1) Interest: Interest on 54EC bonds is taxable. No TDS is deducted on interest from 54EC bonds and wealth tax is exempted.

2) Interest Taxation: No TDS is deducted for resident individual however TDS will be deducted for NRIs. Interest is taxable as per investor income slab for all investors.

3) Tenure: 54EC bonds come with a lock-in period of 5 years (effective from April 2018) and are non-transferable.

4) Investment Amount: Minimum investment in 54EC bonds is 1 bond amounting to Rs. 10,000/- for NHAI and for PFC, IRFC, REC the minimum number of bond should be 2 and the maximum investment in 54EC bonds is 500 bonds amounting to Rs 50 lakhs in a financial year.

5) Interest Rate: 54EC bonds offer 5% rate of interest payable annually.

6) Redemption: Automatic Redemption after 5 Years.

7) Transferability: The 54EC bonds cannot be transferred from one person to another at any point in time.

DOCUMENTS REQUIRED FOR MAKING AN APPLICATION IN 54 EC BONDS

1. Self-attested copy of PAN Card (in case of Joint application, self-attested PAN copy of all the applicants)
OR Form 60 (in case the investor does not have PAN).
2. Cancelled Cheque leaf for payment of interest/redemption through NEFT/RTGS facility.
3. Other documents as applicable below:

Resident Indian Nationals NRIs/ Other Foreign Eligible Investors Partnership Firms Corporates Trust & Foundations
(i) Resident Indian Nationals Documents in support of Name and Address (copies attested by Gazetted Officer/Notary/Self Attested in case of Individual only)

Any ONE of the following for address proof:
a) AADHAAR Card.
b) Passport/Driving License
c) Identify Card issued by any Government Institution
d) Copy of the electricity bill or Gas connection showing residential address
e) Any document or communication issued by any authority of the Central Government, State Government or local bodies showing residential address
f) Voters Identity card
g) Ration Card h) Bank Passbook with address and latest transactions updated
a) Passport (Mandatory)

(i)Photocopy of Cancelled Cheque (NRO Account)
(iv)Self certified address proof
All documents (as applicable) attested by any Partner/Notary

a) Registration certificate, if registered
b) Partnership deed
c) Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf
d) Any officially valid document identifying the partners and the persons holding the Power of Attorney and their addresses
e) Telephone bill in the name of firm/partners
f) Copy of PAN/PAN Allotment letter.
All documents (as applicable) attested by Company Secretary/Director

a) Certificate of incorporation and Memorandum & Articles of Association
b) Resolution of the Board of Directors and identification of those who have authority to operate
c) Power of Attorney granted to its managers, officers or employees to transact business, on its behalf
d) Copy of PAN/PAN Allotment letter.
All documents (as applicable) attested by Trustee/Notary

a) Certificate of registration, if registered
b) Power of Attorney granted to transact business on its behalf
c) Any officially valid document to identify the Trustees, Settlers’, Beneficiaries and those holding Power of Attorney, Founders/Managers/ Directors and their addresses
d) Resolution of the managing body of the Foundation/Association
e) Telephone bill
f) Copy of PAN/PAN Allotment letter (otherwise exemption certificate issued by IT Authorities)
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