The tax liability on long-term capital gains from sale of immovable property can be reduced by purchasing 54EC bonds. The owner of the bonds are the debtholders or creditors of the issuer. These bonds are issued by infrastructure companies that are backed by the government.
Hence, the risk factor gets mitigated by buying such bonds. The capital gain bonds are redeemable before maturity. One cannot sell these bonds as they are not listed in the stock exchange. Assuming that an immovable property is sold at Rs.
The indexed cost of acquisition is 46 lakh and indexed cost of improvement is Rs. Calculate the capital gain that is taxable after claiming exemption in below two cases:. In case if the capital gain bonds are converted into cash before the period of maturity, then the amount so invested on which tax exemption was claimed, shall be taxable as long-term capital gain in the year of conversion. For example, in above case if the bonds are redeemed before the maturity date, say in the financial year , then Rs.
These bonds are not listed in the stock exchange. Hence you can buy them by the issuer directly either in a demat form or a physical form. Let us understand how to invest in the above mentioned bonds:. Thank you for your response. It'll just take a moment. Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image. You are now subscribed to our newsletters.
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