Nomination son

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Query relates to taxability of 54EC bonds where son (NRI) and daughter are nominees. Expert clarified that redemption proceeds received by nominees are not taxable in their hands. Also, the investor can gift money to granddaughter without tax, and deposit in son's NRO account is allowed without tax impact.

Ecstasyvio

Ecstasyvio (Querist)
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18 January 2026 My aunt has invested 500K In 54EC BONDS, she made her son and daughter as nominees for 50% portion each. son is an NRI? Is any tax is applicable when withdrawing after maturity for an NRI NOMINEE? SON has an NRO account in India
Whether any withdrawal tax is applicable for a daughter who is a resident indian?
Aunty wants to provide for granddaughter (sons daughter) some amount for education. can she deposit in sons NRO account w.o. tax. please advice with solution?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 January 2026 Whether the lady is alive at the time of redemption?

Ecstasyvio

Ecstasyvio (Querist)
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19 January 2026 Sir. She is alive now. But after tenure of 5 year's can't say as she is a senior citizen .

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 January 2026 If the payment goes to the lady investor herself, the question doesn't arise. In the adverse case no tax liability of what-so-ever over nominee (even if NRI)
Secondly, she can gift any amount to her granddaughter without any tax liability on either if she deposits the amount to NRO account.

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