Quick Summary
The Ministry of Finance, through the Central Board of Direct Taxes (CBDT), has notified bonds issued by the Housing and Urban Development Corporation Limited (HUDCO) as a 'long-term specified asset' under Section 54EC of the Income-tax Act, 1961. The notification-S.O. 1644(E) dated April 7, 2025-specifies that these bonds must be redeemable after five years and issued on or after April 1, 2025. This move allows taxpayers to claim exemption from capital gains tax by investing in HUDCO bonds unde
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FAQ :
HUDCO bonds issued on or after April 1, 2025, and redeemable after five years are now notified as a 'long-term specified asset' under Section 54EC of the Income-tax Act, 1961.
The notification allows taxpayers to claim exemption from capital gains tax by investing in eligible HUDCO bonds, encouraging reinvestment of capital gains into infrastructure projects.
The bonds must be issued on or after April 1, 2025, and must be redeemable after a period of five years.
The proceeds must be used exclusively for infrastructure projects that are self-sustainable, meaning they can service their debt through project revenues without relying on government guarantees.
The definition follows the Updated Harmonised Master List of Infrastructure sub-sectors issued by the Department of Economic Affairs on October 11, 2022, including any future amendments.
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