• 54EC bonds for savings on Capital Gain - OCI Card holder

I sold a property in India and bought 54EC bonds in 2019. Now I plan to sell 2nd property in India in 2023, can I buy 54EC bonds again? OR is there a limitation on how much you can invest in 54EC bonds within a certain number of years?
Asked 2 months ago in Property Law
Religion: Hindu

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7 Answers

Per Financial year you can invest maximum 50 lacs.

The maximum limit for investing in 54EC bonds is Rs. 50,00,000.

Ganesh Kadam
Advocate, Pune
12669 Answers
211 Consultations

4.9 on 5.0

According to Section 54EC, a taxpayer's capital gains are not subject to taxation if they are invested in "long-term defined assets" within six months of the sale of a long-term capital asset, such as an immovable property or stocks and shares. The term "long-term specified assets" refers to government-notified bonds and securities, such as those issued by the Rural Electrification Corporation and National Highways Authority of India (NHAI) (REC). 

However, you cannot invest more than Rs. 50 lakhs in these bonds in total. If your total capital gains are higher than Rs. 50 lakhs, you may also want to build a house and avail the benefits of Sections 54 or 54F instead of buying bonds under Section 54EC. But if you are not able to opt for either of the above options, you will have to pay LTCG tax on the remaining capital gains amount.

Ajay Sethi
Advocate, Mumbai
90341 Answers
6612 Consultations

5.0 on 5.0

You can do maximum upto 50 lakhs in a year under long term capital gains bond

Prashant Nayak
Advocate, Mumbai
28979 Answers
109 Consultations

4.1 on 5.0

The only limitation is an assessee can invest and amount of 50L in a financial year. You can very much invest up to 50L in 2023 and claim exemption. 

Ravi Shinde
Advocate, Hyderabad
3605 Answers
42 Consultations

5.0 on 5.0

Taxpayers or assessees who acquire capital gains can avail of tax deductions under Section 54EC of the Income Tax Act 1961. This section allows taxpayers to save on tax on any capital gains or profits that they might accrue following the transfer of one or more long-term or original capital assets.

54EC bonds are specifically meant for investors earning long-term capital gains and would like tax exemption on these gains. Tax deduction is available under section 54EC of the Income Tax Act.

Provided further that the investment made by an assessee in the long-term specified asset, from capital gains arising from transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees.

T Kalaiselvan
Advocate, Vellore
80511 Answers
1729 Consultations

5.0 on 5.0

The maximum limit for investing in 54EC bonds is Rs. 50,00,000 in a financial year, and offers 5.00% Interest which is payable annually. The Interest that is earned on these bonds is liable to Income Tax.

Siddharth Jain
Advocate, New Delhi
6247 Answers
101 Consultations

5.0 on 5.0

Dear client 54EC bonds, or capital gains bonds, are one of the best way to save long-term capital gain tax arising out of sale a capital asset. The maximum limit for investing in 54EC bonds is Rs. 50,00,000.  You can apply through your broker if you are interested in investing in 54EC bonds. If you want to purchase, you must do it within 6 months of transferring the asset. The minimum amount to invest is Rs 10,000 and maximum Rs 50 lakhs

Anik Miu
Advocate, Bangalore
6092 Answers
66 Consultations

4.9 on 5.0

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