Products & Services: Section 54 EC - Capital Gain Bonds

Safeguard your long term earnings from Capital Gain Tax

Capital Gains Bonds are instruments which offer tax exemption for transferring gains of long term capital assets. At Sushil Finance, we offer Capital Gains Bond under Section 54EC of the Income Tax Act, 1961.The Investment in these Bonds is to be made within six months from the date of such transfer of capital assets (Land/House Property etc.) for being exempted from Capital Gains Tax.

Bond & Benefits

The eligible bond under Section 54 EC are distributed by SFCL are:

RECL (Rural Electrification Corporation Ltd)
NHAI (National Highways Authority Of India)
PFC (Power Finance Corporation of India)

Features:

The features of each of the bonds are mentioned below:

Features	RECL (Rural Electrification corporation Ltd)	NHAI (National Highways Authority Of India)	PFC Capital Gain Tax Exemption Bonds –Series I
Coupon/Interest rate/Yield	5.25%	5.25%	5.25%
Tax Status	Taxable	Taxable	Taxable
Tax Benefit	SEC 54 EC	SEC 54 EC	SEC 54 EC
Minimum (Rs.)	10,000	10,000	20,000
Maximum (Rs.)	50 Lacs	50 Lacs	50 Lacs
Tenure	5Years	5 Years	5 Years
Mode of Interest	Annual	Annual	Annual

Highlights of NHAI 54 EC Capital Gains Bonds issue : 2018-19

Credit Rating	“Highest credit rating i.e. “ICRA AAA/Stable, CARE AAA/Stable, CRISIL AAA/Stable & IND AAA
Face Value	Rs. 10000/- per Bond
Issue price	Rs. 10000/- per Bond
Minimum application size	One Bond of Rs. 10,000/-
Maximum application size	500 Bonds of Rs.10,000/- each (Rs.50,00,000) subject to fulfillment of other conditions as specified in Income Tax Act 1961. As per the provision of sub-section (1) of section 54EC by the Finance (No. 2) Act, 2014, (w.e.f. 1-4-2015) “ 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”. As a result of the amendment the tenure of the Bonds have been increased to 5 years in place of three years and long term capital gains arising land or building or both shall only qualify to be invested in these bonds after April 1, 2018.
Size of the Issue	Rs.6,000 Crore
Mode of Subscription	100% on application
Deemed Date of Allotment	Last day of the month during which the application amount has been cleared and credited to NHAI’s collection account
Transferability	The Bonds are non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance
Maturity	At par, 5 years from Deemed Date of Allotment
Interest payment	Annually On 1st April and Final Interest at the time of Maturity
Coupon rate	5.75% payable annually.
Redemption	Bullet, at the time of Maturity i.e. 5 years
Trustee	Vistra ITCL (India) Limited (formerly IL&FS Trust Company Limited) The IL&FS Financial Centre, Plot C- 22, G Block, 7th Floor Bandra Kurla Complex, Bandra (East), Mumbai 400051
Registrar	M/s Beetal Financial & Computer Services Pvt Ltd 99, Beetal House, Near Harsukh Das Mandir Behind Local Shopping Centre Madangir, New Delhi-110062 Tel :011 29961281-83 E.Mail :nhaibonds@gmail.com, beetalrta@gmail.com
Closure of Issue	The issue is open on-Tap Basis and will close on March 31, 2019 at the close of the banking hours or on achieving of ceiling limit of Rs.6,000 Crore without any further notice or at a date as may be decided by NHAI at its absolute discretion.

Provisions of Section 54EC

As per provisions of Income Tax Act, 1961, any long term capital gains arising from transfer of any capital asset would be exempt from tax under section 54EC of the Act if:

The entire capital gain realized is invested within 6 months of the date of transfer in eligible bond.
Such investment is held for 5 years.
To avail of capital gain exemption, the bonds so acquired cannot be transferred or converted into money or any loan or advance can be taken on security of such bond within 5 years from date of acquisition else, the benefit would be withdrawn.
If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax.

BONDS	DOWNLOAD
NHAI	Product Note	Application Form	Banking Matrix
PFC	Product Note	Application Form