According to section 54EC of the Income Tax Act 1961, long term capital gain i.e gain from sale of long term capital asset, can be saved by investing the gain amount in ‘long term specified asset’ within six months. Here ‘long term specified asset’ includes capital gain bonds issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation Ltd. (REC) i.e NHAI 54EC Capital Gain Bonds and REC 54EC Capital Gain Bonds.
According to Income tax act, one has to invest the amount of capital gain within 6 months from the date of transfer of asset. It is not certain that everyone get a chance to invest in capital gain bonds u/s 54EC as these bonds are issued only by two authorities in India i.e NHAI and REC, and are not always available for investment.
Recently NHAI has come up with its new issue of capital gain bonds u/s 54EC for the FY 2012-13. The issue is open for the complete financial year i.e starting from April 2, 2012 to March 31, 2013. This is great opportunity for tax payers with capital gain in last six months to invest in these bonds to claim exemption on tax on long term capital gain.
Section 54EC Capital Gain Bonds NHAI : Details
- Face Value (Value Of 1 Bond) Of Capital Gain Bonds Issued By NHAI u/s 54EC : Rs 10,000
- CRISIL Rating on Capital Gain Bonds Issued Bu NHAI u/s 54EC : “AAA”
- The Maximum Amount Of Investment Allowed u/s 54EC : Rs 50,00,000
- Maximum Number Of Bonds Allowed To Be Invested u/s 54EC : 500 Bonds (500* Rs 10,000 = 50,00,000)
- What Is The Maturity Period Of Capital Gain Bonds u/s 54EC : 3 Years
- What Is The Interest On NHAI Capital Gain Bonds u/s 54EC : 6% Annual
- Tax Deducted On Source :- Not applicable on Resident Indians
- Bankers For The Purchase Of Prospectus And Application Form : All the Branches of Union Bank of India/IDBI Bank & Selected branches of Axis Bank, Canara Bank,ICICI Bank, Punjab National Bank,State Bank of India & Syndicate Bank.