54EC Capital Gain Bonds
Save long-term capital gains tax on property sales — invest the gain (up to ₹50 lakh) in AAA-rated REC, PFC or IRFC bonds under Section 54EC.
Overview
When you sell land or a building and make a long-term capital gain, Section 54EC lets you save the tax on that gain by reinvesting it in specified bonds within six months of the sale. These bonds are issued by government-backed entities — REC, PFC and IRFC — carry a AAA rating and a 5-year lock-in, and pay interest annually. You can invest up to ₹50 lakh per financial year to claim the exemption. We help you time the investment, choose the issuer and complete the paperwork so the exemption is secured cleanly.
At a glance
- Section 54EC exemption
- REC / PFC / IRFC
- Up to ₹50 lakh / year
Key benefits
Exempt long-term capital gains tax under Section 54EC (up to ₹50 lakh)
AAA-rated, issued by REC, PFC and IRFC (government-backed)
5-year lock-in with interest paid annually
Must be invested within 6 months of the asset sale
Got questions? We have answers
What are 54EC bonds?
Bonds that let you save long-term capital gains tax on the sale of land or a building by reinvesting the gain in specified bonds under Section 54EC of the Income Tax Act.
Which issuers offer them?
Government-backed entities — REC (Rural Electrification Corporation), PFC (Power Finance Corporation) and IRFC (Indian Railway Finance Corporation). All are AAA-rated.
How much can I invest and by when?
Up to ₹50 lakh per financial year, and the investment must be made within six months of the sale of the asset to claim the exemption.
What is the lock-in and is the interest taxable?
There is a 5-year lock-in, and the bonds cannot be transferred or pledged. Interest is paid annually and is taxable — the capital-gains tax exemption is the main benefit.
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