54EC Bonds

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. 54EC bonds do not allow any tax exemption on short-term capital gains tax. Invest in 54EC bonds to get benefits of tax deduction. The maximum limit for investing in 54EC bonds is Rs. 50,00,000. The eligible bonds under Section 54EC are REC (Rural Electrification Corporation Ltd), PFC (Power Finance Corporation Ltd) and IRFC (Indian Railways Finance Corporation Limited) 

Key Features of 54EC Capital Gain Bonds

54EC bonds are popular investment instruments as investing in 54EC bonds allows investors to claim tax deductions on long-term capital gains. 54EC bonds also offer other features.

  • Safe and Secure: 54EC bonds are AAA rated.
  • Interest: Interest on 54EC bonds is taxable. No TDS is deducted on interest from 54EC bonds and wealth tax is exempted.
  • Tenure: 54EC bonds come with a lock-in period of 5 years (effective from April 2018) and are non-transferable.
  • Investment amount: Minimum investment in 54EC bonds is 1 bond amounting to Rs. 10,000 and the maximum investment in 54EC bonds is 500 bonds amounting to Rs 50 lakhs in a financial year.
  • Interest Rate: 54EC bonds offer 5.25% rate of interest payable annually.





Key Benefits of 54EC Bonds

         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.
   Take a look at the benefits of investing in 54EC bonds. 

SAVE TAX

Long-term capital gains from investments in 54EC bonds or sale of 54EC bonds can be reinvested in order to save tax.

SECURITY

54EC bonds are backed by the government, hence the risk factor associated with buying 54EC bonds is mitigated.

EARN & SAVE

Investing in 54EC bonds allows you to save tax while earning interest income from the 54EC bonds.

USER PREFERANCE

54EC Bonds can be held in either demat or physical form.









Power Finance Corporation Ltd (PFC)

         Click here for Online Application : PFC

         PFC has launched Series VI of PFC Capital Gain Bonds u/s 54EC of Income Tax Act 1961, w.e.f 1st April 2022.

    Indian Railways Finance Corporation Ltd (IRFC)

            Click here for Online Application : IRFC

         IRFC has launched Series VI of Capital Gain Bonds u/s 54EC of Income Tax Act, 1961 on 1st April 2022. These Bond have tenor of 5 years and the Rate of Interest for
   the bonds is 5% p.a. The issue of Series VI IRFC 54EC Bonds will remain open till 31st March 2023 or earlier at discretion of IRFC

Rural Electrification Corporation Ltd (REC)

         Click here for Online Application : REC

         REC has launched Series XVI of Capital Gain Bonds u/s 54EC of Income Tax Act, 1961 on 1st April 2022. These Bond have tenor of 5 years and the Rate of Interest for
   the bonds is 5.00 p.a. The issue of Series XVI REC 54EC Bonds will remain open till 31st March 2023 or earlier at discretion of REC.