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54ec bond

parag (individual) (70 Points)

27 August 2016

Dear Expert I have purchased 54EC bond in the year March-15 of Rs. 5,00,000/-. Now I would like to purchase new house and I would like to redeem the said bond and use the same amount to make the payment to purchase new house. So my question is that can I do so? If yes then what will be the tax implications?

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CA Mehul Chudasama (Chartered Accountant) (618 Points)
Replied 27 August 2016

Lock in period – 3 years

If such bonds is transferred or redeemed within 3 years of its purchase, the amount of capital gains exempt earlier is taxable under the head “Capital Gains” as long term capital gain in the year of transfer or redemption of such bonds.

So within 3 Years you are not able to redemed this bond