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Capital Gain Bonds

These are bonds in which the profit arising from the sale of a property or any financial asset or any other capital gain from any asset can be invested. These bonds have a lock-in period of 5 years and one can invest in these bonds upto a maximum amount of Rs. 50 lakhs. Currently, these bonds are being issued by NHAI (National Highway Authority of India), REC (Rural Electrification Corporation Limited) and Power Finance Corporation and some more which are approved by GOI from time to time

What is the taxation policy applicable on Capital Gain Bonds?

Capital Gain Tax is levied on Capital Gains received from sale of a long term capital asset. This tax levied can be saved by the seller, if the sale proceeds are further invested in Capital Gain Bonds specified under Section 54EC within 6 months of receipt. The exemption from Capital Gains is possible only if the asset is sold after being held for 3 years or more. In case the asset is sold before 3 years, them it is considered as short term capital gain and is therefore subject to applicable taxation slab. The interest earned on Capital Gain Bonds is not subject to tax exemption. The interest earned is treated as part of the annual income and is therefore subject to the taxation slab as applicable for the investor. The interest earned on these bonds is payable annually and the funds are directly credited to the bank account of the investor. Rs. 50 lakh is the aggregate maximum exemption allowed under Section 54EC irrespective of the financial year, as per Budget 2014.

Can Capital Gain Bonds be used as collateral in a loan?

Can I sell these bonds? Capital Gain Bonds are non-transferable and non-negotiable. They cannot be pledged or offered as collateral / security while applying for a loan. No you cannot sell these bonds. Capital Gain Bonds are issued for a period of 5 years and as per Section 54EC, they cannot be sold before these 5 years. These bonds are not listed on the stock exchanges.

Features
Safe and Secure
All Capital Gain Bonds are AAA rated 
Tenure Lock-in-period of 5 Years from Deemed Date of Allotment
Coupon (%p.a.) 5.00% p.a, payable annually
Face Value Rs. 10,000/- per bond.
Minimum Investment 1 bond of Rs. 10,000/-
Maximum Investment Rs. 50,00,000/- in a financial year (Subject to section 54EC of Income Tax, 1961
Taxability Interest Taxable and TDS will not be deducted
Transferability It is non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance
Redemption/Maturity Bonds are automatically redeemed on maturity

Why Capital Gain (54EC) Bonds?

  • Save Tax Invest your Long Term Capital Gain from sale of capital asset in these bonds within 6 months from sale of such asset to get tax exemption.

  • Secure These are backed by Government making them a highly secure investment.

  • Earn These bonds offer not only tax exemption, but also an assured return on the investment.

  • Accessibility One can hold 54EC Capital Gain Bonds in any form, Physical or DEMAT.

Documents Required

  • Self – Attested Copy of PAN Card and Address Proof

  • Cancelled Cheque Copy for ECS payment of Interest & Maturity

Eligibility

  • Individuals

  • Hindu Undivided Families (HUF)

  • Partnership Firm / LLP / Insurance Companies / Companies and Body Corporates

  • Provident Funds, Superannuation Funds and Gratuity Funds

  • Banks / Mutual Funds / Financial Institutions (FIs) / FPIs (Subject to existing regulations)

  • RRBs / Co-operative Banks.

  • NRIs/other foreign eligible investor investing out of NRO A/c on non-repatriable basis subject to applicable law

  • Any other investor subject to applicable laws


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Cheque / DD should be drawn in favour of

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“REC Limited -54 EC Bonds” or “Rural Electrification Corporation Ltd-54EC Bonds”

RTGS Details

Bank A/c No IFSC Code MICR Code Branch
HDFC Bank 00030350000584
HDFC0000003 
110240001 
Surya Kiran Building, New Delhi
ICICI Bank 000405108563 
ICIC0000004 
400229002 
Churchgate, Mumbai

Cheque / DD should be drawn in favour of

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National Highways Authority of India”

RTGS Details

Bank NameBeneficiary NameA/c NumberIFSC Code
Union Bank Of India
National Highway Authority Of India 
536401010000419 
UBIN0553646
ICICI Bank
NHAI CG Bond Issue Account 2471201001184 
CNRB0002471 
IDBI Bank 
National Highway Authority Of India 
998103000002561 
IBKL0000998 
ICICI Bank 
National Highways Authority Of India 
000405100716 
ICIC0000004 
Syndicate Bank 
NHAI Bond 
90622010065585 
SYNB0009062 
HDFC Bank 
National Highways Authority Of India 
00030350007025 
HDFC0000003
Axis Bank 
NHAI 54ec Capital Gains Bond Issue 
912020019237448
 UTIB0000207 

    

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Cheque / DD should be drawn in favour of

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“PFC Capital Gain Bonds”

RTGS Details

Bank A/c No IFSC Code MICR Code Branch
HDFC Bank 57500000034792
HDFC0000003
110240001 Kasturba Gandhi Marg, Delhi 
ICICI Bank 000405115137
ICIC0000004
400229002
Nariman Point, Mumbai