Investment in Bonds

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This discussion explores investing capital gains from property sales into bonds for tax exemption under Section 54EC of the Income Tax Act. The user inquired about investing Rs. 50 lakhs from a Rs. 205 lakhs property sale into a Capital Gains Bond, following a previous Rs. 40 lakhs investment. The advice confirms that investing Rs. 50 lakhs is permissible within six months of the second property sale, allowing for tax exemption on that amount while the remaining gain is taxable.

chandrasekhar

chandrasekhar (Querist)
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19 September 2021 I have already sold a property and the gain was invested in Capital Gain in a Bond with National Highway authority.in 2018 for an amount of Rs.40 lakhs. Now i intend to sell another property for around Rs.205 lakhs and the gain would be around 70 lakhs. Can i invest in capital gain bond an amount of Rs.50 lakhs now and get the tax exemption and pay tax for the balance amount of Rs.20 lakhs.

If not what is the alternative available for availilng the benefit

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 September 2021 Both the transaction are independent, due to different assessment years.
You can very well invest Rs. 50 lakhs additionally (within six months from the sell/transfer of your second property,) and save the LTCG tax u/s. 54EC of IT act.

chandrasekhar

chandrasekhar (Querist)
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19 September 2021 thank you sir for your advice

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 September 2021 My Pleasure ....

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