{"id":7796,"date":"2020-01-20T10:00:21","date_gmt":"2020-01-20T04:30:21","guid":{"rendered":"http:\/\/www.apnaplan.com\/?p=7796"},"modified":"2020-01-20T10:13:26","modified_gmt":"2020-01-20T04:43:26","slug":"invest-capital-gain-bond-save-taxes","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/invest-capital-gain-bond-save-taxes\/","title":{"rendered":"Should you Invest in Capital Gain Bonds (54EC) to Save Taxes?"},"content":{"rendered":"

We love to Save taxes<\/strong><\/span> and one of the ways to save on Long term Capital Gains Tax on Real Estate is to invest in Capital Gains Tax Saving Bonds u\/s 54EC from NHAI, REC, IRFC or PFC<\/strong>.<\/p>\n

Below are few rules to avail this tax exemption:<\/strong><\/span><\/p>\n

1. Only Long Term capital gains from Real Estate are eligible<\/strong> to be invested in these bonds<\/p>\n

2. You can invest capital gains up to Rs 50 lakhs<\/strong> in these bonds<\/p>\n

3. These bonds give interest of 5.75% <\/strong>and have maturity tenure of 5 years<\/strong> [changed from 3 to 5 years in Budget 2018<\/a>]<\/em><\/p>\n

4. The tax exemption is covered under section 54EC of Income tax<\/strong><\/p>\n

5. The interest earned on the bonds are taxed<\/strong> according to your marginal income tax slab<\/p>\n

\n

Download:<\/strong> Excel based Capital Gains Calculator for Property<\/a><\/p>\n<\/blockquote>\n

Capital Gain Bonds \u2013 Should You Invest?<\/h2>\n

The question now is should we invest in Capital Gains Bond to save tax or pay capital gains tax and invest as per our convenience for higher returns?<\/p>\n

Assumptions:<\/strong><\/p>\n

Amit has Long Term Capital Gains on sale of Property of Rs 50 Lakhs and he has two options<\/p>\n

    \n
  1. \n
      \n
    1. Invest in Tax Saving Bond and Capital Gains OR<\/li>\n
    2. Pay Capital Gains tax and invest the rest<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      The table below covers both the scenarios<\/p>\n

      \"Invest
      Invest in Capital Gains Tax Saving Bond to Save Taxes<\/strong><\/figcaption><\/figure>\n

      As you can see with people in highest tax bracket of 30%, need to make at least 8.63% returns\u00a0after tax which may be achievable by investing in right investments.<\/strong>\u00a0This number would be higher for people in lower tax brackets!<\/p>\n

      I think investing in capital gains bond is totally your choice – if you think you can generate higher return than that mentioned in the last row of our calculation, then pay your capital gains tax and invest accordingly.<\/p>\n

      \n

      Also Read:<\/strong> \u00a0<\/strong>How are your Investments Taxed?<\/a><\/p>\n<\/blockquote>\n

      To Conclude:<\/h2>\n

      I think investing in capital gains bond is totally your choice – if you think you can generate higher return than that mentioned in the last row of our calculation, then pay your capital gains tax and invest accordingly.\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

      We love to Save taxes and one of the ways to save on Long term Capital Gains Tax on Real Estate is to invest in Capital Gains Tax Saving Bonds u\/s 54EC from NHAI, REC, IRFC or PFC. Below are few rules to avail this tax exemption: 1. Only Long Term capital gains from Real […]<\/p>\n","protected":false},"author":1,"featured_media":7799,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2322,3013,9,6],"tags":[3927,3233,1101,2290],"uagb_featured_image_src":{"full":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes.png",1021,565,false],"thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes-150x150.png",150,150,true],"medium":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes-300x166.png",300,166,true],"medium_large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes-768x425.png",768,425,true],"large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes.png",1021,565,false],"1536x1536":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes.png",1021,565,false],"2048x2048":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes.png",1021,565,false],"yarpp-thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2017\/02\/Should-you-Invest-in-Capital-Gains-Bond-to-Save-Taxes.png",120,66,false]},"uagb_author_info":{"display_name":"Amit","author_link":"https:\/\/www.apnaplan.com\/author\/admin\/"},"uagb_comment_info":3,"uagb_excerpt":"We love to Save taxes and one of the ways to save on Long term Capital Gains Tax on Real Estate is to invest in Capital Gains Tax Saving Bonds u\/s 54EC from NHAI, REC, IRFC or PFC. Below are few rules to avail this tax exemption: 1. Only Long Term capital gains from Real…","_links":{"self":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/7796"}],"collection":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/comments?post=7796"}],"version-history":[{"count":0,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/7796\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media\/7799"}],"wp:attachment":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media?parent=7796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/categories?post=7796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/tags?post=7796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}