54EC Capital Gains Tax Exemption Bonds
Section 54 EC: A Brief
Get tax exemption with capital gains through 54EC Bonds. According to section 54 EC of Income Tax 1961, an investor is allowed a deduction in respect of long-term capital gains arising on sale of an asset, if the amounts of capital gains are invested in 54 EC bonds.
Why invest in capital gains bonds?
- Get tax exemption on capital gains
- Risk-free investment that pays 5.75% interest per annum
- Investment of upto Rs 50 lacs amount in one financial year is allowed to avail tax benefit
Key Features of 54EC Bonds
- Provides exemption on capital gains tax (LTCG)
- Lock-in of 5 years and non- transferable>
- Minimum investment amount of Rs 10,000 and multiples
- Maximum investment limit of up to Rs. 50 Lakhs in a Financial Year across the two available Bonds
- Rate of Interest 5% p.a. payable annually
- 100% risk free payment, highest credit rating of AAA by CRISIL, CARE and FITCH
- Facility of payment of interest and redemption through ECS
- Bonds can be held in Demat /Physical Form
- Automatic Redemption after 5 Years without surrendering Bonds Certificate
- Interest is taxable but no TDS on interest
Arihant Capital is official arranger of these both REC and NHAI 54EC Bonds. To invest or for more details SMS < Arihant > to 56677
NHAI and REC 54 EC Bonds - Key Features
| Bond | REC 54EC | NHAI 54EC |
|---|---|---|
| Coupon/Interest rate/Yield* | 5.00% p.a. | 5.00% p.a. |
| Rating | AAA / Stable (CRISIL) | AAA / Stable (CRISIL) |
| Tenor | 5 Years | 5 Years |
| Face Value / Issue Size per bond | Rs 10,000 / Rs 10,000 | Rs 10,000 / Rs 10,000 |
| Tax Status | Interest is taxable | Interest is taxable |
| Tax Benefit | SEC 54 EC | SEC 54 EC |
| Minimum Investment | Rs 20,000 (or 2 bonds) | Rs 10,000 (or 1 bond) |
| Investment Maximum | 500 bonds of Rs 50 lacs in a Financial Year across REC & NHAI | 500 bonds of Rs 50 lacs in a Financial Year across REC & NHAI |
| Mode Of Interest | Annual | Annual |
| Interest Date | 30th June | 1st April |
| Trustee | SBICAP Trustee Company Ltd., Mumbai | M/s IL & FS Trust Company Ltd |
| Put/Call/Premature Encashment | Bullet repayment at the time of Maturity | Bullet repayment at the time of Maturity |
| More Details | REC 54 EC Bond Details | NHAI 54EC Bond Details |
* The interest rate changes every financial year, this is for FY2018-19
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