The date of allotment of the bonds is considered as the date of investment. Individuals as well as members of HUF can make investments in 54EC bonds. You should invest in 54EC bonds within 6 months of transferring capital asset. 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.
Do note that there is a cap on the capital gain that can be reinvested in a 54EC Bond, and the limit has a ceiling of Rs.50 lakh. Yes, NRIs can claim the exemption the exemption under section 54EC of the Income Tax Act. However, the land or building that has been sold to result in a capital gain should be located in India. Want to know about more tax-saving investment options or don’t know how to plan your taxes?
Investing in 54EC bonds requires fully understanding the terms, benefits, and limitations. Arming yourself with the exhaustive handbook places you in an informed position regarding the suitability of 54EC bonds in your investment portfolio. The interest rate and policy with respect of 54EC bonds are subject to change from time to time, depending on government regulations and changing economic conditions. Investors are advised to keep themselves informed through the Notices periodically made available by PFC, IRFC, and REC. Please note that by submitting the above mentioned details, you are authorizing us to Call/SMS you even though you may be registered under DND. We shall Call/SMS you for a period of 12 months.Brokerage will not exceed SEBI prescribed limits Disclaimer Privacy Policy Any Grievances related the aforesaid brokerage scheme will not be entertained on exchange platform.
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This factor depends on the rate of return as well the maturity period on other investments. Such investment amount can be redeemed by the investor only after 5 post-closing trial balance years. This shift in the period has increased the revenue from interest on these capital bonds in 2019. BondsIndia is a brand name of Launchpad Fintech Private Limited, an e-business platform for Fixed Income securities that uses technology as a means to provide quality & real-time financial solutions to users.
Investing in Bonds: Stability for Secure Financial Growth
- Fixed-income instruments include government bonds, debentures, fixed deposits, etc.
- Receive information of your transactions directly from Stock Exchange / Depositories on your mobile/email at the end of the day.
- If you want to purchase, you must do it within 6 months of transferring the asset.
- You can apply for the 54 EC bonds offline (Physical) and online.
- While you can save your tax bill by investing the proceeds in another property, but that doesn’t help much.
We all have Rs.150,000 covered under section 80C in the form of PF or FDs or like. And an additional deduction allowed up to a limit of Rs.50,000 under section 80D. An example would better explain the difference between 54EC bonds and other investment options and whether it is profitable for an investor to gain more from other investments even if they need to incur taxes on those.
How does Capital Gains Bonds help in Tax Exemptions?
Trusted by over 2 Cr+ clients, Angel One is one of India’s leadingretail full-service broking houses. We offer a wide range of innovativeservices, including online trading and investing, advisory, margin tradingfacility, algorithmic trading, smart orders, etc. Our Super App is apowerhouse of cutting-edge tools such as basket orders, GTT orders,SmartAPI, advanced charts and others that help you navigate capitalmarkets like a pro. You can apply through your broker if you are interested in investing in 54EC bonds. If you want to purchase, you must do it within 6 months of transferring the asset. The minimum amount to invest is Rs 10,000 and maximum Rs 50 lakhs.
As always, you need to align your investment decisions in light of your financial goals and the capability and strategy of tax planning. Section 54EC bonds, also known as Capital gain bonds are fixed income instruments which provide capital gains tax exemption under section managing sales tax 54EC to the investors. Are you looking to sell your property but are worried about paying tax for gains? A long-term capital gain is any revenue that you get from the sale of an asset.
Key Features of 54EC Bonds
Selling your capital assets for a generous amount of profit is surely a moment of joy, but it also comes with capital gains taxes. However, there are various ways to avoid this tax or minimize your capital gains tax liability. One such way is to invest your capital gains in capital gains bonds specified under section 54EC a guide to audit materiality and performance materiality of the Income Tax Act.
54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax. 54EC bonds are specifically meant for investors earning long-term capital gains and would like tax exemption on these gains. Tax deduction is available under section 54EC of the Income Tax Act.
