Capital Gain Bonds | Interest Rate | NHAI | REC | PFCL | IRFC | How to Buy Online? |

Investment in Capital Gain Bonds

Are you looking to sell your land or building, but are worried about paying taxes for gains? Then Capital Gain Bonds will best option for you.
Capital Gain Bond is the gain that is derived out of a sale of an asset that has been held for more than 2 years. Asset means Land or Building.
These Bonds are being issued as ‘Long term specified assets‘ within the meaning of subsection 54-EC. Therefore, also called as 54-EC Bonds or Tax Free Bonds.
54-EC Bonds, are one of the prefect way to save long-term capital gains tax arising out of the sale a capital asset.
The tax deduction is available u/s 54 EC of the IT Act 1961.
Here’s a Quick Look about Capital Gain on Bonds.

Read How to Invest in Indian Bonds? What are Bonds? Types of Bonds? 2021

Capital Gain on Bonds

Advertisement

Gains arising from the transfer of a capital asset (Land or Building) are considered capital gains. Therefore, a tax requires to be paid on the income that is received. The tax that is paid is called capital gains tax.

Capital gains are of 2 types, Short-term capital gains (STCG) and Long-term capital gains (LTCG) depending on the period of holding.

You can reduce the liability of these taxes.
Invest in Capital Gain Bonds, also known as Tax Free Bonds, to avail tax deductions in the future.
Tax Free Bonds are issued as per the provisions of the under section 54-EC of the Income Tax Act 1961.
This bonds don’t permit any tax exemption on short-term capital gains tax(STCG).

Tax Free Bonds Features

Lock-in period5 years.
Automatic option is available for redemption after 5 Years.
Rate of Interest5.00% per annum payable annually
TaxationInterest is taxable. However, no TDS is deducted.
RatingAAA rated (CRISIL)
Mode of HoldingPhysical or Demat
Minimum Limit1 Bonds (Rs. 10,000).
Maximum Limit500 Bonds (Rs 50,00,000 Lacs) in a financial year.
Transferability/loanNon-transferable, cannot be offered as a security for any loan.
PrematurityNot available

What are the bonds that fall in this bracket?
They are bonds proposed by Rural Electrification Corporation Ltd (REC), Power Finance Corporation Limited (PFCL), Indian Railways Finance Corporation Limited (IRFC) and National Highways Authority of India (NHAI), among others.

Capital Gain Bonds NHAI

National Highways Authority of India (NHAI ) has launched Series XXI of Tax Free Bonds under section 54EC of IT Act, 1961.
The issue of Series XXI Capital Gain NHAI Bonds will remain open till 31st March 2021 or earlier at discretion of NHAI.
Here’s a feature of Capital Gain Bonds NHAI.

Coupon/Interest rate5.00% p.a.
RatingAAA / Stable (CRISIL)
Tenor5 Years
Face Value / Issue Size per bondRs 10,000 / Rs 10,000
Tax StatusInterest is taxable
Tax BenefitSEC 54 EC
Minimum LimitRs 10,000 (or 1 bond)
Maximum Limit500 bonds of Rs 50 lacs in a Financial Year
Mode Of InterestAnnual
Interest Date1st April
TrusteeM/s IL & FS Trust Company Ltd
Put/Call/Premature EncashmentBullet repayment at the time of Maturity
Source NHAI

Capital Gain Bonds REC

Advertisement

Rural Electrification Corporation Ltd (REC) has launched Series XIV of Tax Free Bonds under section 54EC of IT Act, 1961 on 1st April 2020.
The issue of Series XIV Capital Gain REC Bonds will remain open till 31st March 2021 or earlier at discretion of REC.

Coupon/Interest rate5.00% p.a.
RatingAAA / Stable (CRISIL)
Tenor5 Years
Face Value / Issue Size per bondRs 10,000 / Rs 10,000
Tax StatusInterest is taxable
Tax BenefitSEC 54 EC
Minimum InvestmentRs 20,000 (or 2 bonds)
Investment Maximum500 bonds of Rs 50 lacs in a Financial Year across REC & NHAI
Mode Of InterestAnnual
Interest Date30th June
TrusteeSBICAP Trustee Company Ltd., Mumbai
Put/Call/Premature EncashmentBullet repayment at the time of Maturity
Source – REC

Capital Gain Bonds PFCL

Power Finance Corporation(PFCL) has launched Series IV of Tax Free Bonds under section 54EC of IT Act, 1961.
These Bond have tenor of 5 years and the Rate of Interest is 5% per annum.
The issue of Series IV Bonds will remain open till 31st March 2021 or earlier at discretion of PFCL.

Capital Gain Bonds IRFC

Advertisement

Indian Railways Finance Corporation Limited(IRFC) has launched Series IV of Tax Free Bonds IRFC under section 54EC of IT Act, 1961 on 1st April 2020.
These Bond have tenor of 5 years and the Rate of Interest is 5% per annum.
The issue of Series IV Bonds will remain open till 31st March 2021 or earlier at discretion of IRFC.

Capital Gain Bonds Interest Rate

NHAI5.00% per annum
REC5.00% per annum
PFCL5.00% per annum
IRFC5.00% per annum

How to Buy Capital Gain Bonds Online & Offline

Advertisement
BondsOnline Mode
NHAI Series XXINA
REC Series XIVClick here
PFCL Series IVClick here
IRFC Series IVClick here
Source – Kfintech

Capital Gain Bonds in SBI Online

Application Forms

BondsApplication Forms
NHAI Series XXIICICI direct
HDFC securities
SBI
REC Series XIVICICI direct
HDFC securities
SBI
PFCL Series IVICICI direct
HDFC securities
SBI
IRFC Series IVICICI direct
HDFC securities
SBI

Premature Withdrawal of 54-EC Bonds

54-EC Bonds are non-transferable, non-negotiable and
You can not withdrawn at any time before the expiry of 5 years from the date of its investment.

Advertisement
Advertisement
error: Content is protected !!