Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What 54EC offers
If you have a long-term capital gain on land or a building, you can exempt it by investing the gain in 54EC bonds — issued by NHAI, REC, PFC or IRFC — within 6 months of the sale. Unlike Section 54, you don’t have to buy a house, which suits sellers who simply want to shelter the gain.
Limits and lock-in
The maximum is ₹50 lakh (across a financial year), the bonds carry a 5-year lock-in, and they pay interest of around 5% which is taxable. Breaking the lock-in reverses the exemption. You invest the gain, not the whole sale value. Confirm the current limit, rate and lock-in per the Finance Act.
A worked example
Example: you have a ₹45 lakh long-term gain on a plot. Investing ₹45 lakh in 54EC bonds within 6 months makes the whole gain exempt. If your gain were ₹80 lakh, you could shelter ₹50 lakh in bonds and use Section 54 or pay tax on the rest. Buy the bonds early, as the six-month window and funding cycles can be tight. Our team can plan the combination.