54EC Capital Gains Tax Exemption Bonds

Section 54 EC: A Brief

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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 5.25% 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 3 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 5.25% 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 3 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* 5.25% p.a. 5.25% p.a.
Rating AAA / Stable (CRISIL) AAA / Stable (CRISIL)
Tenor 3 Years 3 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 FY2016-17

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