In my previous articles I have explained about the capital gains and suggested few ideas to save the tax arising from the capital gains. In this article I will write down another suggestion to save the capital gains tax. If you have any doubts post it in the comments section. Please subscribe to our future articles here.
Capital Gains Tax Saving Bonds
- If you are sellingany of your land or property, which results in the capital gains. There is 20% tax deducted for the capital gains. It is good time you should seriously think about saving that money.
- Investors who have capital gains and want to save tax arising on this gain, can use the capital gains tax saving bonds for this specific purpose only. However, the income arise out of this bonds are not tax-free. You have to pay the tax for that.
- If you have long-term capital gains on sale of a property or gold: you’ll save tax by investing in this bond.
- For example if you have made the capital gains of Rs.300000. If you are not planning to save the capital gains tax, you have to pay Rs.60000 as the tax. But, if you are investing the whole or part of that amount in the capital gains tax saving bonds, you need not pay the tax for that invested amount.
- The gain has to be long-term in nature. Only then can the Section 54EC bond be used. It cannot be used to save short-term capital gains.
- You need to invest into the bonds within six months from the date of the transfer of the asset.
- You can invest a maximum of Rs 50 lakh in the bonds, so there is a restriction on the amount that can be claimed as a benefit.
Summary
I hope this article would be very useful for those who want to save the capital gains tax. If you have any doubts please post it in the comments section. I will answer your questions. Thank you for reading!!
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December 7, 2009 at 6:04 pm
Thanks for the tip, very useful.
January 28, 2010 at 5:36 am
HAI, I WANT TO INVEST FUND IN AGRICULTURAL LAND WHICH IS FROM SALE OF 3 YR OLD PROPERTY. WHAT IS MY TAX LIABILITY ?
February 4, 2010 at 4:28 am
I am planning to sale my equity shares in a company. it will earn capital gain @ Rs. 40.00 crore. how can i save tax this capital gain.
February 14, 2010 at 9:49 am
can i keep capital gain bond as colateral security to bank to avil loan
April 30, 2010 at 10:25 am
If we invest in the tax saving bonds..how long do we have to stay invested in them?
May 7, 2010 at 9:53 pm
I ( My name only ) purchased Residential property in 1989 – 90 for Rs 80000. On 7th April 2010 , I sold the property for 75 Lakhs .
On 06th May 2010 , I inevsted Rs 50 Lakhs ( Rs 25 Lakhs in REC and Rs 25 Lakhs in NHAI Capital Gains Bonds )
Now , I am left with Rs 25 Lakhs
Currently myself & mywife jointly owns a Flat , which was purchased in 2001 at Rs 9 Lakhs
Can I invest the Balance Rs 25 Lakhs in SBI Capital Gains Account and Can I purchase within 3 years , one more property in my name or jointly with my wife ?? , does this help me in not paying Capital Gains for Rs 25 Lakhs ??
August 9, 2010 at 6:11 am
Sir, My residential plot was acquired by Government. After deuctionof indexed cost the Capital Gains 1s about Rs12,50,000.
Can I invets the amount in SBI capital gain Tax saving Bonds . Afetr edemption after 3/5 yrs is the invested amount liable for Capital gain tax?
August 9, 2010 at 6:18 am
Sir, My residential Plot purchsed in 1986 was acquired by Governmentin 2010.. After deduction of Indexed cost the Captial gain comes to about Rs.12,50,000. If I invest this or lesser amount say 11,00,000 in SBI Capital Gain Tax Saving bond of 3 or 5?yrs will the principal amount of Rs 12,50,000 or 11,00,000 as the case may be be exempt from capital gain Tax. Is it laible to be taxed as income during the year ofr Redemption. Secondly will I be free to spend/Invest it wherever I desire?
Deshpande.
October 18, 2010 at 10:05 am
thank for your nice sugessetion for investment
March 8, 2011 at 1:52 am
My wife got 8 lacs out of her father`s inherited plot of land. she intend to invest in NHAI capital gains saving Bonds.
Pl. suggest the procedure
V P Gupta
August 24, 2011 at 5:13 am
I sold a flat after holding for 11 years on which I have a capital gain of Rs. 25,00,000/. How to save tax on this? If I invest in NHAI bonds for 3 years do I get my investment back along with 6% tax.
Is the capital or tax is to be taxed then.
S.Singhal
December 1, 2011 at 7:31 pm
Hi,
My mother inherited a property about 2 years ago and we are now selling the property for 1.9 crore. The index on the property is at this time is 18 lakh. So the taxed amount is 1.7. At 20% that comes to around 35 lakh. I want to save on the taxes and take the 80%, which would not be taxed and invest 20% into a government bond. After 3 years, will I only be taxed on the capital gain or will it be the full amount? Is there such a bond out there.
Thanks,
M
December 11, 2011 at 3:34 am
u said the limit for capital tax saving bonds is 50 lac. this limit is lifetime limit or one financial year limit?
December 19, 2011 at 3:58 am
in 2007 a small piece of agriculture land was sold for Rs 4 lakhs & under advice the said amount was invested in Syndicate bank VCC-CAPITAL GAINS SCHEME to save Capital gain tax. The said Certificate has matured & the amount now is Rs 5.44lakhs. i was told by the bank that the same amount need to be reinvested in the new property. Iam confussed. Could you please advice me in this matter.
Ramesh.
January 10, 2012 at 6:00 am
For investing in Capital gain (54EC) bonds in Chennai, Please contact 9840288233
January 12, 2012 at 4:06 am
sir, if sell my property and gain Rs 3000000,should i have to deposit whole amount to capital gain account or part of it? other than s.b.i what are the oher banks who has “capital gain” account?
January 21, 2012 at 3:52 am
Can a person get full Tax Benefit of more than 50 lakhs on Long Term Capital Gain on sale of land, by investing the full amount other than in property. The LTCG amount has been received in November 2011.