Month: December 2020

Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. These bonds are highly secure, sovereign in nature with a AAA rating. Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

Investing in Bonds: Stability for Secure Financial Growth

54EC Bonds do not allow any tax exemptions on short term capital gains tax. 54EC Bonds involve tax exemptions on long-term capital gains for investors who have sold their properties. The investment should be made within six months from the date of sale. The investment for individual investors is capped at Fifty lakhs. For partnership businesses, each partner qualifies to invest Fifty lakhs. The 54ec capital gain bonds are tax exemption bonds, allow you to avoid paying tax on capital gains arising from selling property.

These bonds continue to be tax exempted, and no tax is deducted at the source. However, the interest gained is taxable and must be mentioned during the tax return filing. The tax rate of capital gains arising from the sale of long-term capital assets is 20% if the individual fails to invest such capital gains in specified capital gains bonds.

Understanding Capital Bonds: A Comprehensive Guide to 54EC Bonds for Indian Investors

We tell you how to save on taxes on any long-term capital gain. A long-term capital gain is any revenue that you get from the sale of an asset. According to the Income Tax Act, you are liable to pay tax for such gains. However, you can reduce the liability of these taxes.Invest in section 54EC bonds, also commonly known as capital gain bonds, to avail tax deductions in the future. The bonds are issued as per the provisions of the section 54EC of the IT Act. They are bonds offered by Rural Electrification Corporation Ltd (REC), Power Finance Corporation Limited (PFCL) and National Highways Authority of India (NHAI), among others.

1. 54EC Bonds or Capital Gains Bonds is one such instrument to consider and know about, which will get you an exemption from the capital gains tax that you might have incurred on a long term asset provided certain conditions are met.
2. You will need to declare capital gain from 54EC bonds under your return filing since no tax is deducted at the source.
3. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax.
4. These bonds are highly secure, sovereign in nature with a AAA rating.
5. You can buy these bonds online through the respective company’s website or contact a broker.

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But not many of us might be aware of an investment in a financial instrument which provides an exemption from capital gains tax  (up to a cap of Rs.50 lakh). No, you can’t redeem the investment before the maturity of bonds i.e. before 5 years from the date of investment. If you redeem bonds before their maturity, the exemption granted under Section 54EC will not be granted and you will have to pay LTCG tax on the original capital gains amount. The assessee has invested the amount of capital gain (wholly or partly) in the long term specified assets.

BondsIndia is a brand name of Launchpad Fintech Private Limited, an e-business platform for Fixed Income securities that uses technology as a means to provide quality & real-time financial solutions to users. The bonds can be credited in their DEMAT account or can be purchased in physical form. Trusted by over 2 Cr+ clients, Angel One is one of India’s leading retail full-service broking houses. We offer a wide range of innovative services, including online trading and investing, advisory, margin trading facility, algorithmic trading, smart orders, etc.

These 54EC bonds make a good investment for long-term capital gains tax-saving in India. The interest rate may not compare with certain other investment options, but it often stands well with the managerial accounting definition leverage of tax exemption benefits. As always, you need to align your investment decisions in light of your financial goals and the capability and strategy of tax planning. This way, you make most of your investments in 54EC bonds. Investors can gain tax exemptions under section 54EC with capital gain bonds.

Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. These bonds are highly secure, sovereign in nature with a AAA rating. Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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54EC Bonds are for investors looking to economise capital gain taxes. To avail the tax exemption, you need to invest in these bonds within 6 months of the date of the sale of the property. 54EC bonds are issued for a lock-in period of 5 years and are non-transferable at any point of time. accounting ethics and integrity standards NRI Investment in Bonds is a very popular and rewarding opportunity.

However, interest rates are subject to revision by the respective Companies/Government from time to time. 54EC Bonds are issued by PSU’s notified by the government ( REC , PFC , NHAI and IRFC). Capital gain bonds are safe, secure and offer a decent rate of interest. You can apply for the 54 EC bonds offline (Physical) and online. All categories of persons are eligible to avail exemption benefit under section 54EC of the Income Tax Act.

What is Section 54EC of the Income Tax Act?

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone. Investors need to make an investment in 54EC Bonds within 6 months from the date of the sale of their asset generating capital gains.

When should I invest in 54EC bonds?

54EC Bonds do not allow any tax exemptions on short term capital gains tax. 54EC Bonds involve tax exemptions on long-term capital gains for investors who have sold their properties. The investment should be made within six months from the date of sale. The investment for individual investors is capped at Fifty lakhs. For partnership businesses, each partner qualifies to invest Fifty lakhs. The 54ec capital gain bonds are tax exemption bonds, allow you to avoid paying tax on capital gains arising from selling property.

1. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department.
2. Schedule a call with an investment expert to get complete help regarding investment in 54EC Bonds in India.
3. Please note that by submitting the above mentioned details, you are authorizing us to Call/SMS you even though you may be registered under DND.
4. Selling capital assets triggers tax on profits as capital gains, but tax can be avoided.

The income earned from the long-term capital gains will be taxable from the year you obtained the loan. NRIs can buy capital gains bonds issued by the National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC), etc. to save tax on their long-term capital gains from the sale of their property in India. In case of transfer / conversion, the amount of exemption claimed under section 54EC shall be deemed to be income under ‘Capital Gains’ as long term capital gain in the previous year in which the long term specified asset is transferred or converted. These are bond for capital gain tax exemption, and so individuals and HUFs can apply. If you want to invest in 54EC bonds, you need to do it within six months of selling the property.

54EC bonds are specific types of bonds issued by government-approved entities like the Power Finance Corporation Limited (PFC), Indian Railways Finance Corporation Limited (IRFC), and the Rural Electrification Corporation (REC). Selling capital assets triggers tax on profits as capital gains, but tax can be avoided. Section 54EC allows exemption by investing in specific bonds like NHAI, REC, PFC, or IRFC.

We tell you how to save on taxes on any long-term capital gain. A long-term capital gain is any revenue that you get from the sale of an asset. According to the Income Tax Act, you are liable to pay tax for such gains. However, you can reduce the liability of these taxes.Invest in section 54EC bonds, also commonly known as capital gain bonds, to avail tax deductions in the future. The bonds are issued as per the provisions of the section 54EC of the IT Act. They are bonds offered by Rural Electrification Corporation Ltd (REC), Power Finance Corporation Limited (PFCL) and National Highways Authority of India (NHAI), among others.