Interest received on rec infra bonds

This query is : Resolved

CA Sanjay Baheti (Querist)
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13 September 2012 Interest received on Rural Electrification Corporation's Infrastructure Bonds is taxable or not.

Please Note that said investment of Rs.20000/-was made in F.Y.2010-11 with a view to claim additional Deduction of Rs.20000/- under section 80CCF of I.T.Act.

CA Amit Rajput

CA Amit Rajput (Expert)
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13 September 2012 Do not worry dear
Entire interest received on REC bond will be exempted.

Prof. Bajaj

Prof. Bajaj (Expert)
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15 October 2012 In my opinion, interest received on REC Infra Bonds will be clubbed with your income and will be taxed as per slab.

CA Amit Rajput

CA Amit Rajput (Expert)
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15 October 2012 Dear please verify the provision related to this interest on NHAI and REC

Prof. Bajaj

Prof. Bajaj (Expert)
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15 October 2012 Dear Mr. Amit Rajput,

The said bonds are infra bonds u/s 80CCF. Only the investment made in these bonds is eligible for tax deduction.

However, the interest received on these bonds is taxable.

Coming to NHAI and REC, I think you got confused with the capital gains tax saving bonds u/s 54EC. But even in that case, the interest received on those bonds is taxable. Only the investment made upto Rs. 50 Lakhs is eligible to save capital gains tax, if someone has long term capital gains tax liability.

Hope this is clear now.

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