Which bonds are eligible under the Section 54EC?

Which bonds are eligible under the Section 54EC?

Bonds eligible for exemption under section 54EC of the Income Tax Act

• Rural Electrification Corporation Limited or REC bonds,
• National Highway Authority of India or NHAI bonds,
• Power Finance Corporation Limited or PFC bonds,
• Indian Railway Finance Corporation Limited or IRFC bonds.

What capital gains are exempted u/s 54?

Exemption under section 54 can be claimed in respect of capital gains arising on transfer of capital asset, being long-term residential house property. This benefit is available only to an individual or HUF. The benefit can be claimed by purchasing or by constructing a residential house.

Which of the following is eligible for availing exemption u/s 54?

To claim exemption under section 54, the taxpayer should purchase a residential house within a period of one year before or two years after the date of transfer of old house or can construct a house within a period of three years from the date of transfer.

What can I invest capital gains in to avoid taxes?

You can use retirement savings vehicles, such as 401(k)s, traditional IRAs, and Roth IRAs, to avoid capital gains and defer income tax. With 401(k)s and traditional IRAs, you can invest in the market, through a platform like TD Ameritrade, using pretax dollars.

How do I invest in REC or NHAI bonds?

There is no online mechanism of purchasing these bonds and a person would be required to physically visit their office and fill in the physical form. After purchasing these bonds – you may either hold them in physical form or demat form but there is no way to purchase these bonds online.

Are 54EC bonds (capital gains bonds) a good investment?

54EC bonds (capital gains bonds) are the best investment option through which an investor can save long-term capital gain taxes. 54EC bonds are specifically meant for investors earning long-term capital gains and would like tax exemption on these gains. The tax deduction is available under section 54EC of the Income Tax Act.

How Section 54 EC bonds can be used to save tax?

Section 54 EC bonds can be used to save tax only when the capital gain is derived from land or building or both. 2. It cannot be used to save tax on capital gain arising from the sale of non-equity mutual funds, debentures, gold jewelry or gold ETFs. 3. The maximum investment in these bonds is Rs. 50 lakh only.

How to save long term capital gains tax under section 54EC?

INVEST TO SAVE LONG TERM UNDER SECTION 54EC. Capital Gain Bonds: Long-term capital gain is the gain that is derived out of a sale of an asset (Land or Building) that has been held for more than two years. You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the date of sale of the asset.

How to save tax on Long-Term Capital Gains on investment property?

You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the date of sale of the asset. Save tax on long-term capital gains by investing in 54EC bonds such as REC capital gain bonds, NHAI capital gain bonds respectively.