Section 85 Capital Gain Tax Exemption Bonds ( Erstwhile Section 54EC of Income Tax Act, 1961)
The widely known 54EC Capital Gain Bonds have now been reintroduced as Section 85 Capital Gain Tax Exemption Bonds under the new Income Tax Act. According to Section 85, any person (Individual, HUFs, Partnership Firms, Companies etc) can avail exemption in respect of long term Capital gains (arising from the sale of land or property) , if the capital gain is invested in Capital Gain Bond. The exemption will be the amount of Capital Gain or the amount of investment made, whichever is less and has to be availed within six months of the sale of land / property. The maximum amount that can be invested in Section 85 bonds is Rupees Fifty lakhs.
Features
- Interest rate : 5.25% per annum
- Tenure / Lock-in-Period of 5 years
- Minimum Investment Amount is Rs. 20,000/- and maximum investment limit of up to Rs. 50 Lakhs in a year across the four issuers for claiming 54EC benefit.
Issuers for Capital Gain Tax Exemption Bonds
HUDCO (Housing and Urban Development Corporation Limited)
IRFC (Indian Railway Finance Corporation Ltd)
PFC (Power Finance Corporation Ltd)
REC (Rural Electrification Corporation Ltd)
Disclaimer -
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2. Kindly contact your financial / tax advisor to check the suitability of the product.
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