From My Desk
Date	25-May-2014
Subject	Capital gain Bonds
Details	Note on capital Gain Bonds ( Movable asset) If the capital asset(property) is held for more than 3 years & sold afterwards, long term capital gain tax of 20% is applicable, Else short term capital gain tax is applicable as per individual tax slab. Section 54EC however provides an option to save tax on capital gain arising from transfer or sale of capital asset. The capital gain will be exempt from tax only if it is reinvested in specified asset within period of 6 months of capital gain. The specified asset are the bonds redeemable after 3 years issued by national bank for Agriculture or rural development (NABARD) or national highway authority of India ( NHAI) or Rural electrification corporation (REC). This bonds gives annual Interest of 6% & upto 50 lakh long term capital gain is exempted if invested in this bonds. However the Interest earned in the bonds are taxable in investor hands as per his Income tax slab. Note as per income tax Act http://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2008itact/cirsec54ec.htm
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