Are there any bonds in which I can invest my capital gains to claim tax relief?
Hi @Nitin ,
As per section 54EC - An assessee can claim tax relief by investing the amount of long-term capital gain arising from:
a) any long term capital asset (upto A.Y 2018-19)
b) long term capital asset being land or building or both (From A.Y 2019-20)
in the specified bonds as follows:
a) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by National Highways Authority of India (NHAI) or
b) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by Rural Electrification Corporation Limited (REC) or
c) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 15th June 2017 by Power Finance Corporation Limited or
d) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 08th August 2017 by Indian Railway Finance Corporation Limited or
e) Bond redeemable after 5 years from A.Y 2019-20 (3 years for A.Y 2018-19) issued by any other authority but notified by Central Government [Applicable from A.Y 2018-2019]
within a period of 6 months from the date of transfer of capital asset and such bonds should not be redeemed before 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) from the date of their acquisition.
This benefit cannot be availed in respect of short-term capital gain.
Maximum amount of investment in specified bonds cannot exceeds Rs. 50,00,000. Thus, deduction under section 54EC cannot be claimed for more than Rs. 50,00,000.
Hope this helps.
Namita
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Section 54EC of the Income Tax Act in India provides provisions for claiming tax relief on long-term capital gains by investing in specified bonds issued by entities like the Rural Electrification Corporation (REC) or the National Highways Authority of India (NHAI).
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