Wednesday 15 February 2017

Capital Gain Exemption under section 54EC (Investment in certain Bonds) - Budget 2017




Budget proposed investment in any bond redeemable (Notified by central government) after three year shall also eligible for deduction section 54EC.

Earlier, only the investments in bond issued by the National Highways Authority of India or by the Rural Electrification Corporation Limited are eligible for exemption under this section.

Section 54EC provides that capital gain to the extent of Rs. 50 lakhs arising from the transfer of a long term capital asset shall be exempt if the assesse invests the whole or any part of capital gains in certain specified bonds, within specified time.

It is proposed to amend section 54EC so as to provide that investment in any bond redeemable after three years which has been notified by the Central Government in this behalf shall also be eligible for exemption.

The amendment will be applicable for previous year 2017-18 and subsequent years.

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