The bonds qualified under Section 54 EC include REC (Rural Electrification Corporation), NHAI (National Highways Authority of India), IRFC (Indian Railway Finance Corporation), and PFC (Power Finance Corporation Ltd).
NHAI or REC: which bond is better?
REC bonds have a somewhat higher rating than NHAI bonds. Because NHAI bondholders must request for surrender of bonds at maturity, which is after 5 years, and only then is the maturity amount redeemed and paid by cheque or ECS. It will be automatically redeemed and paid by check or ECS in the case of REC bonds.
Is a REC bond tax-exempt?
Tax benefits u/s 10 (15) (iv) (h) of the Income Tax Act, 1961 – interest on these Bonds does not form part of total income REC has launched Tax Free Bonds aggregating Rs.
Are REC bonds taxable when they mature?
Interest on the NHAI and REC bonds is 5.75 percent per year, payable annually beginning April 1st. Under the heading “Income from Other Sources,” the interest collected on these bonds is completely taxed. The interest on these bonds would not be taxed at the source.
Is it possible to redeem REC bonds before they expire?
What happens if I redeem the REC/NHAI bonds before the three-year period has expired? Yes, as long as you put the money into REC/three-year NHAI’s bonds.
In India, how are bonds taxed?
“Short-term capital gains on government bonds are taxed at the regular rates that apply to an individual’s income. Long-term capital gains from listed government bonds, on the other hand, are taxed at a rate of 10% (without indexation) “nefit),” Vasudevan explains.
What is the best bond for capital gains?
54EC bonds, also known as capital gains bonds, are one of the most effective ways to avoid paying long-term capital gains taxes. 54EC bonds are designed for investors who have long-term capital gains and want to avoid paying taxes on them. Section 54EC of the Income Tax Act allows for a tax deduction. Short-term capital gains tax exemptions are not available with 54EC bonds. Invest in 54EC bonds to take advantage of tax savings. The maximum amount that can be invested in 54EC bonds is Rs. 50,000. REC (Rural Electrification Corporation Ltd), PFC (Power Finance Corporation Ltd), NHAI (National Highways Authority of India), and IRFC are among the qualified bonds under Section 54EC (Indian Railways Finance Corporation Limited).
How can I go about purchasing infrastructure bonds?
If you have a demat account, you can apply to invest in an infrastructure bond online. You must complete an online application form.
These relationships can be applied for in a physical form. You’ll need a PAN card that has been self-attested. As part of the KYC (Know Your Customer) procedure, you must provide proof of identity and address.
After the lock-in period has expired, these bonds can be exchanged on stock exchanges like stocks.
How do I get started with REC?
This post will show you how to apply for 54EC Capital Gains Tax Exemption bonds online and pay using net banking or debit card, either through a broker or directly.
I intend to sell our previous residence. I’d like to put money into 54EC bonds. Is there a way to invest over the internet? I don’t want to reinvest in property and I also don’t want to pay taxes, thus I want to invest this money Amol Chavan
Our Answer: 54EC bonds are designed for investors who want to make long-term capital gains. You can obtain a tax break on long-term capital gains by investing in these bonds. They are known as 54EC bonds because they qualify for a tax deduction under section 54EC of the Income Tax Act.
The investor should have the following information and documents in PDF format ready before we begin the online process.
Karvy offers three bond issuers the ability to invest in 54EC bonds online.
1. Select the “For the bond issuer you like, click the “Fill a New Form Online” button.
2. Complete and submit the online application form.
3. Upon successful application submission, you will receive an SMS.
4. Fill out the application form completely.
5. Print the aforementioned form and have all applicants certify their signatures (s).
6. Scan the application copy, which has been signed by all applicants, and save it as a PDF.
7. Select the “Upload Application/KYC Documents” option should be selected.
8. To validate the application form, enter the following application details as they were supplied online.
9. Make a click “To receive an OTP on your email and mobile, click the “Get OTP” button.
10. Click on the OTP that was sent to your phone or email address “Verify.”
11. The application information will be displayed after validation.
12. To proceed with payment, please upload the following valid PDF documents.
13. Payment will be enabled once the above documents have been uploaded.
14. Use Netbanking or a Debit Card to make a payment.
15. Whether the payment is successful or unsuccessful, an acknowledgement will be prepared and sent through email.
Here is a little tutorial for investors who want to accomplish everything from application to payment without using a broker. The procedure for REC bonds has been described. Others, such as PFC and IRFC, go through a similar procedure.
1. Click here to download the REC bond form
2. Select the ‘direct’ option on the download page.
3. Enter the captcha after selecting the quantity of forms to download.
4. A ZIP file containing the form pack will be downloaded.
5. Once you’ve unzipped the file, you’ll see a PDF of the actual form (marked as private and confidential).
6. Complete the form and gather the necessary documentation on your own.
7. Investors must submit the completed Application Form, along with a Demand Draft or account payee cheque payable to “REC Ltd- 54EC” or “Rural Electrification Corporation Limited 54EC Bonds” and the required enclosures, to the designated branches of collecting banks Axis Bank, Canara Bank, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank, or Union Bank.
You can also make a direct NEFT/RTGS deposit into the REC collection account and fill out the application forms found on the REC website, making sure to include the UTR number in the box provided. Here are the bank account details for transferring funds.
G 3/4, 19 K G Marg, Surya Kiran Building, New Delhi 110001 is the branch address.
8. Visit http://www.recindia.nic.in/capital-gain-tax-exemption/ or call RTA/REC Investors Services Cell at 011-43091527 or 011-24361320 for allotment/ servicing status or any other information.