NRI investing in section 54EC bonds

Toseef (Service) (26 Points)

07 January 2022  

Hi,

I am a NRI (OCI card holder). I recently sold inherited land in India. The sale proceeds are deposited in my NRO account. I want to invest the capital gain from this sale into section 54EC bonds to save on taxes.

My aim is to invest the money into 54EC bonds and then after 5 years of lock-in period (when bond matures), move the principal amount of the bond to my NRE account.

I already have a non-repatriable demat account linked to my NRO account.

If I deposit the section 54EC bond into this demat account, would I be able to move the matured bond money from my NRO account to NRE account after its maturity, since the bond was kept in a 'non-repatriable' demat account all through its lock-in period?

or should I get the bond in physical form rather than depositing it in demat account?

Awaiting your guidance