Capital gains

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Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2013 what will be the tax liability if after 3 years the bonds needs to be redeemed??

CA Pallav Singhania

CA Pallav Singhania (Expert)
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30 October 2013 Capital gain would be proportionate according to legal heirs...

Such amount can be invest in NHAI/RECL Bonds @ 6 percent interest with a lock in period of 3 years U/S 54EC max of 50 lacs p.a..

Features of It..

1.Investment into these bonds save long term capital gains.

2. It is locked in for 3 years.

3. Demat account is not compulsory to invest in these bonds.

4. Currently REC and NHAI issue such bonds.

5. Rate of interest from these bonds are 6% pa and paid out every year.

6. TDS on the interest payable will not be deducted.

7. Remember the yearly interest earned is taxable under the head of income from other source.

8. The maximum cap for the investment is Rs. 50 lacs.

9. The Bonds are non-transferable, non-negotiable and cannot be offered as a security for any loan or advance.

Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2013 WHAT IF AFTER 3 YEARS THE PERSON WANTS TO REDEEM THE BONDS, WILL IT BE TAXABLE???

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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30 October 2013 Maturity amount is exempt since it has been invested for the purpose of saving tax .

The idea of committing to such a low rate of interest is to make the proceeds tax free on investment and maturity.

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