Capital Gain Bonds
Capital Gain Bonds are investment instruments that allow you to defer capital gains tax incurred from the sale of assets. By reinvesting your gains into these bonds, you can save on taxes while earning a stable return. They offer a tax-efficient way to manage your capital gains and support long-term financial planning.
Why should you choose this product?
- Get tax exemption on capital gain.
- Maximum investment limit of up to ₹50Lakh in a financial year for each PAN number
- 5.25% interest per annum payable annually
Which bonds are Eligible?
The eligible bonds are:
- RECL (Rural Electrification Corporation Ltd)
- IRFC (Indian Railway Finance Corporation Ltd)
- PFCL (Power Finance Corporation Limited)
Provisions of Section 54EC
- The entire capital gain realized is invested within 6 months of the date of transfer in eligible bonds
- Such investment is held for 5 years.
- To avail of capital gain exemption, the bonds so acquired cannot be transferred or converted into money or any loan or advance can be taken on security of such bond within 5-years from date of acquisition else, the benefit would be withdrawn.
- Interest earned – 5.25 % – per annum is taxable.
| Bond | RECL | PFCL | IRFC |
|---|---|---|---|
|
Interest Rate |
5.25 % Annually |
5.25 % Annually |
5.25 % Annually |
|
Credit Rating |
AAA / Stable (CRISIL) |
AAA / Stable (CRISIL / CARE / ICRA) |
AAA / Stable (CRISIL / CARE / ICRA) |
|
Tax Benefit |
Sec 54 EC |
Sec 54 EC |
Sec 54 EC |
|
Minimum Investment |
₹ 20,000 |
₹ 20,000 |
₹ 20,000 |
|
Maximum Investment in a Financial Year |
50 Lakh per PAN |
50 Lakh per PAN |
50 Lakh per PAN |
|
Tenure |
5 Years |
5 Years |
5 Years |
|
Interest Date |
30th June |
31st July |
15th October |
|
Mode of Interest |
Annual |
Annual |
Annual |
|
Applicability of Taxation |
Taxable |
Taxable |
Taxable |
|
Put / Call / Premature Encashment |
No |
No |
No |
|
NRI Eligibility |
Yes |
Yes |
Yes |