Capital Gain Bond
Capital Gains Bonds (U/S 54EC)
Under Section 54 EC of Income Tax, 1961 an investor need not pay any tax on any long-term capital gains arising on sale of any asset, if the amounts of capital gains are invested in certain specified bonds. Rural Electrification Corporation Limited (REC) & National Highways Authority of India (NHAI) are permitted to issues capital gains bonds under Section 54 EC.
1. Some key features of Section 54 EC bonds are:
- Highest credit rating of AAA by CRISIL, CARE and FITCH.
- Interest is taxable although no TDS is deducted.
- Lock-in of around 3 years and non- transferable.
- Minimum amount of investment Rs 10,000 and multiples.
- Rate of Interest 6.00% p.a. payable annually
2. Features of NHAI Capital Gain Bonds Series XVI:
- Issue is Open ,Closes on-31.03.2016
- Rate of Interest 6.00% p.a. payable annually
- Facility of Payment of Interest and Redemption through N ECS
- Bonds can be held in Demat /Physical Form
- Automatic Redemption after 3 Years without surrendering Bonds Certificate
- No TDS on Interest
3. Features of REC Bonds Series-X
- Issue is Open ,Closes on-31.03.2016
- Rate of Interest 6.00% p.a. payable annually on 30th June
- Facility of Payment of Interest and Redemption through N ECS
- Bonds can be held in Demat /Physical Form
- Automatic Redemption after 3 Years without surrendering Bonds Certificate
- No TDS on Interest
- Minimum Investment Rs 10000, Maximum Investment Rs 50 lakhs
