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Interest on REC 54EC bonds taxable or not?

13 September 2019

i have invested 45 lakhs in 54EC bonds in dec 2018. I will be earning interest this year. is the earned interest taxable or not?

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (193928 Points)
Replied 13 September 2019

Its taxable u/h. IFOS....

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Kapadia Pravin (17264 Points)
Replied 13 September 2019

Interest is taxable on 54EC bonds under Income from other sources.

However there will be NO TDS on the interest amount.

Pranav Aggarwal (525 Points)
Replied 13 September 2019

What about maturity of above fund after 5 years??

Kapadia Pravin (17264 Points)
Replied 14 September 2019

It's your own you are receiving back after 5 years lock-in.

No question of tax on maturity amount.

Suresh Thiyagarajan (Student) (3986 Points)
Replied 14 September 2019

1. There is no express provision which specifies that interest received from REC bonds are exempt. To the contrary there also no TDS provision which requires deduction of tax when interest is paid.
2. This makes it taxable under Income from other sources and there cannot be any deductions attached to the above income.
3. Maturity amount will not be liable to tax.
Please correct me if the above solution has an alternative view.