CAPITAL GAIN BONDS

 

Capital Gain Bonds u/s 54 EC of Income Tax Act, has been allowed to be issued by Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Maximum investment allowed per person per FY is Rs. 50 lacs and the Interest Income is taxable in the hands of the investors, as per his or her tax bracket.

 

What are Long Term Capital Gains?
Any gain arising from the transfer of a capital asset after holding it for more than thirty six months (more than twelve months in case of share held in a company, any other security listed in a recognized stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of a Mutual Fund specified under clause (23D) of section 10 or a zero coupon bond) during a previous year is rechargeable to tax under the head "Capital Gains" in the immediately following assessment year.

 

CAPITAL ASSET
Capital Asset means all moveable or immovable property except trading goods, personal effects, agricultural land other than within municipal areas or within 8 kilometers from it wherever notified and gold bonds. Jewelry and ornament are not personal effects and their sale will attract capital gains.

 

Capital Gains Bonds (U/S 54 EC of IT Act)