Capital GainsDeductionsHouse Property

Key Features of REC Bonds for Section 54EC Exemption



A person can claim an exemption under Section 54EC from the long-term capital gains arising from the transfer of land or building after two years of purchase. This exemption is available if the taxpayer invests the gains in bonds of NHAI or REC.

Key Features of REC Bonds

[REC Capital Gains Tax Exemption Bonds-Series-XIII]

1. Credit Rating

These bonds are rated as ICRA AAA, CARE AAA/Stable, CRISIL AAA/Stable & IND AAA/Stable.

2. Issue Price

These bonds are issued at their face value of Rs. 10,000 per bond.

3. Application Size

The application can be filed for minimum 2 bonds and for maximum 500 bonds. The size of the application shall be seen in the financial year itself in which the original asset is transferred and in the subsequent financial year. Application once submitted cannot be withdrawn.

4. Deemed date of allotment

Last day of the month during which the application amount has been cleared and credited to REC collection account

5. Maturity

The bonds shall be matured at par at the end of the 5th year from the deemed date of allotment. During the tenure, these bonds are non-transferable, non-negotiable and cannot be offered as a security for any loan or advance.

6. Interest

The coupon rate is 5.75% which is payable annually on 30th June of each year. Interest earned from these bonds is taxable, however, no tax is deducted therefrom. However, the tax shall be deducted if interest is payable to a non-resident investor.

7. Collecting Banks

The application can be submitted in specified branches of the following banks:

  • HDFC Bank
  • Axis Bank
  • Canara Bank
  • ICICI Bank
  • IDBI Bank
  • Indusind Bank
  • Yes Bank

8. Documents to be furnished

It is mandatory for the applicant to mention his PAN in the application. In case, he has applied for and not yet been allotted the PAN, he can furnish a copy of the acknowledged Form 49A. In case the investor is applying through a demand draft and PAN has not been allotted he can furnish a declaration in Form 60.

9. Closure of issue

The issue will close on March 31, 2020.

Key Features of NHAI Bonds for Section 54EC Exemption

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