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Capital Gain Bond

54EC bonds or capital gain bonds can be described as financial instruments which provide tax exemptions under Section 54EC to an investor. Long-term capital gains (LTCG) tax arising from sale of property can be saved by investing in these bonds These are issued by certain Public Sector Undertakings (PSUs). These bonds have a lock-in of five years. The Current rate of interest available on these bonds is 5%, which is taxable.


Safe and Secure: 54EC bonds are AAA rated by ICRA, CARE and CRISIL

Tenure: Lock-in period of 5 years and are non-transferable.

Interest Rate: 5% payable annually.

Bonds eligible: REC (Rural Electrification Corporation), NHAI (National Highways Authority of India), IRFC (Indian Railway Finance Corporation) & PFC (Power Finance Corporation Ltd) offers the bonds eligible under Section 54EC.

Key Points to Note:

The Capital Gain amount should arise from the sale of property.

Investment should be made in these bonds within 6 months from the sale of property to avail the tax exemption benefit.

Minimum Investment can be made from Rs.10,000/- and maximum can not exceed Rs.50 Lakh in a Financial year.

Interest is paid annually and TDS is not deducted however.

PFC Capital Gain Bond

PFC Capital Bond

IRFC Capital Bond

NHAI Capital Gain Bond -

NHAI Capital Gain Bond


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