54EC bonds let you save tax on long-term capital gains from selling land or a building by investing the gain in bonds of specified government-owned issuers, such as REC, PFC and IRFC, within six months of the sale.
The bonds have a five-year lock-in, cannot be sold or pledged during that time, and the investment that qualifies is capped at ₹50 lakh in a financial year. Interest is paid at a fixed rate set by the issuer and is taxable.
The rules are in section 54EC of the Income-tax Act 1961 and its successor provisions. Check the current rules and the eligible issuers before relying on the exemption.
Related
Related terms: Tax-free bond · Coupon rate
Before investing, look up the issuer: all its outstanding bonds, rating history and disclosure documents.
This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
