Section 54EC – Capital Gains Bonds

54EC bonds, or capital gains bonds, are one of the best ways to save long-term capital gain tax. 54EC bonds are specifically meant for investors earning long-term capital gains and would like tax exemption on these gains

Individuals, as well as members of HUF, can make investments in 54EC bonds. You should invest in 54EC bonds within 6 months of transferring the capital assets.

The eligible bonds under Section 54EC

1. NHAI (National Highways Authority of India)
2. REC (Rural Electrification Corporation Ltd)
3. PFC (Power Finance Corporation Ltd)
4. IRFC (Indian Railways Finance Corporation Limited)

54EC bonds also offer other features.

• Safe and Secure: 54EC bonds are AAA rated.
• Interest: Interest on 54EC bonds is taxable. No TDS is deducted on interest from 54EC bonds and wealth tax is exempted.
• Tenure: 54EC bonds come with a lock-in period of 5 years (effective from April 2018) and are non-transferable.
• Investment amount: Minimum investment in 54EC bonds is 1 bond amounting to Rs. 10,000 and the maximum investment in 54EC bonds is 500 bonds amounting to Rs 50 lakhs in a financial year.
• Interest Rate: 54EC bonds offer a 5% rate of interest payable annually.

We are committed to providing you with the required assistance in applying and registering for all your capital gains investment requirements. 

Corporate Fixed Deposit

A company FD also referred to as term deposit is a type of Fixed Deposit issued by organisations such as finance companies, housing finance firms, or other NBFCs. It serves as a great way to raise funds from the general public for business investments. These timed deposits are usually rated for their credibility by a number of rating agencies such as ICRA, CARE, CRISIL, etc. The maturity period of an FD may range from a few months to a few years.

Under Companies Act 58A, these deposits can be availed by manufacturing companies, financial institutions, and non-banking finance companies. FDs offer one of the easiest ways to obtain funds for a company from the general public. More significantly, it is a minimal risk venture, especially when compared to debentures.

Benefits:

• The interest rate is higher than bank fixed deposits
• You have a choice of systematic payment option
• Most of the fixed deposits are rated by the Credit Rating Agency

At Harvest, we are committed to providing you with the requisite knowledge about investing in corporate FDs and their associated risks.