InvestorQ : What are 54EC bonds? Are there any bonds available for sale?
Kalyani Sundaram made post

What are 54EC bonds? Are there any bonds available for sale?

Rishita Das answered.
9 months ago
54EC bonds are capital gain exemption bonds, as an investment in these bonds allows exemption under section 54EC of the Income-tax Act. These bonds are generally offered to investors who earned long-term capital gains sale of capital assets such as land or building, or both, and would like tax exemption on these gains. The biggest advantage of these bonds is that they are backed by the government, which means the risk of capital payment and interest is protected. The eligible bonds under the said section include bonds on offer by the National Highway Authority of India (NHAI) and Rural Electrification Corporation Ltd (REC). One has to invest a minimum of Rs 10,000 in NHAI bonds and Rs 20,000 under REC bonds. However, the maximum limit for investing in 54EC bonds is Rs. 50 lakhs in a financial year. These bonds offer an interest rate of about 5.60- 5.75%, payable annually. Interest income from these bonds shall be taxable in the hands of the investor. The lock-in-period for these bonds is 5 years.

You can invest in 54EC bonds through various service providers such as HDFC securities, etc. These bonds are currently available under 54EC bonds:

REC (Rural Electrification Corporation)
NHAI (National Highway Authority of India)
PFC (Power Finance Corporation Limited)
IRFC (Indian Railway Finance Corporation)