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Section 54 ec exemption

Nikita (-) (54 Points)

02 June 2016

I want to know if we invest LTCG after Indexation from Sale of Immovable Property in NHAI Bonds, will the amount we receive on redemption of the bonds be subject to tax. If yes, slab rates apply for individual?

Also, the coupon receipt if less than the Basic Exemption Limit if there is no other income to the individual will become exempt?

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Jigar Shethiya (Manager in Audit & Taxation) (77 Points)
Replied 02 June 2016

Assuming you are investing for saving cap gains, the bonds have a lock in of 3/4/5 years depending on issuer. The interest on the bonds is taxable year on year, but no TDS is deducted on the interest. At the time of maturity after lock in , there is no tax incidence.