Capital Gains Bonds

These bonds are issued by Central government Public sector Undertakings like REC, NHAI etc. The investors can claim benefits under section 54EC of the Income Tax Act of 1961. Whenever an investor makes long term capital gains through the sale of land, house or stocks, by investing in these bonds exemption can be claimed. The investment limit is capped at Rs.50 lacs in a financial year per individual and the investment must be made within 6 months from the date of sale of the asset.

Sample of a Capital Gains Bond

Issuer Fixed interest rate Maturity date Early payment date(if any) Interest dates Unit size of each bond
REC capital Gains Tax exemption bonds 5.75% 5 Years (60 Months) Not applicable 30th June(annually) Rs.10,000