Capital Gain Bonds or 54EC bonds help investors to claim tax exemption for 6 months after the sale of a property or asset. The maximum limit for investing 50,000,00. These are specifically meant for investors who are earning long-term capital gains and want tax exemption on them.
Features of Capital Gain Bonds
These are some of the main features of Capital Gain Bonds –
1. Interest rate: Capital Gain Bonds offer a decent rate of interest (5.75%) annually. Also the interest earned on bonds is taxable.
2. Safety: Capital Gain Bonds are safer as they are backed by public sector enterprises.
3. Transferability: Capital Gain Bonds can be transferred from one person to person.
4. Tenure: Capital Gain Bonds offer tenure of 5 years.
Benefits of Capital Gain Bonds
These are some of the prime benefits of investing in Capital Gain Bonds –
1. Capital Gain Bonds helps you to save taxes on capital gains.
2. An annual interest of 5.75% is earned on Capital Gain Bonds.
3. Capital Gain Bonds can be kept in demat or physical format.
4. Capital Gain Bonds are backed by the Government of India so they are comparatively safer and there is no need to worry about returns.
