54EC Capital Gain Bonds
REC
(Rural Electrification Corporation)
- Minimum Investment
- ₹20,000
- ROI (per annum)
- 5.25
- Interest Credit Date
- 30th June
- Rating
- AAA
IRFC
(Indian Railway Finance Corporation)
- Minimum Investment
- ₹20,000
- ROI (per annum)
- 5.25
- Interest Credit Date
- 15th October
- Rating
- AAA
PFC
(Power Finance Corporation)
- Minimum Investment
- ₹20,000
- ROI (per annum)
- 5.25
- Interest Credit Date
- 31st July
- Rating
- AAA
Bid Entry & Modification Timing
- It's worth noting that these bonds have a specific purpose, which is to encourage individuals to reinvest their profits from property sales and provide them with a tax-saving option. By investing in these bonds, you can defer your tax payment and potentially earn interest on your investment.
- Capital gain bonds also come with some additional benefits. They typically offer a fixed interest income, which means you can earn regular interest payments on your investment. This interest income is taxable based on your income tax rate.
- Please note that when investing in capital gain bonds, it is important to be aware of the lock-in period. This period refers to a specific duration, typically 5 years, during which you will not be able to withdraw your invested funds. Once this lock-in period is over, you'll receive your initial investment amount back without any additional tax implications.
- To be eligible for capital gain bonds, you need to be an individual or a Hindu Undivided Family (HUF) who has earned long-term capital gains from specific assets. Long-term capital gains are usually profits from assets that you held for more than a certain period, such as one year
- However, it's important to remember that the interest you earn on these bonds is subject to income tax. So, when you receive the interest payments, you will need to pay taxes on that income according to your income tax rate.
Key Features
Rate of Interest
54EC bonds offer 5.25% rate of interest payable annually.
Transferability
The 54EC bonds cannot be transferred from one person to another at any point in time.
Investment Amount
Amount of 1 bond is 10,000/- and for PFC, IRFC, REC the minimum number of bond should be 2 that is 20,000/- for each and the maximum investment in 54EC bonds is 500 bonds amounting to Rs 50 lakhs in a financial year.
Tax applicable on interest
No TDS is deducted for resident individual however TDS will be deducted for NRIs. Interest is taxable as per investor income slab for all investors
Maturity
54EC bonds come with a lock-in period of 5 years (effective from April 2018).
Tax applicable on interest
No TDS is deducted for resident individual however TDS will be deducted for NRIs. Interest is taxable as per investor income slab for all investors
