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CRISIL
AAA
5%Annually31 Aug 25
INDIA
AAA
5%Annually31 Oct 25
CRISIL
AAA
5.75%Annually31 Jan 24
CRISIL
AAA
5%Annually31 Jan 27
CRISIL
AAA
5.75%Annually31 May 23
CARE
AAA
5.75%Annually30 Apr 23
INDIA
AAA
5.75%Annually30 Apr 25
INDIA
AAA
5%Annually31 Jan 26
INDIA
AAA
5.75%Annually30 Nov 24
INDIA
AAA
5%Annually31 May 26
CRISIL
AAA
5.75%Annually31 May 25
CRISIL
AAA
5.75%Annually30 Sep 23
INDIA
AAA
5.75%Annually31 Mar 24
INDIA
AAA
5%Annually30 Sep 25
CRISIL
AAA
5%Annually31 May 26
INDIA
AAA
5%Annually31 Jul 26
CRISIL
AAA
5.00%Annually30 Apr 27
INDIA
AAA
5.75%Annually31 Aug 24
CRISIL
AAA
5.75%Annually31 Mar 24
CRISIL
AAA
5%Annually31 Aug 27
1-20 out of 117

Capital gains bonds in India

Capital gains bonds are bonds that help investors save long-term capital gains arising from the sale of a capital asset (like land or property).


What income tax section talks about capital gains bonds?

Income tax section 54EC discusses the benefits of capital gains bonds.


Who should invest in capital gains bonds?

Investors who have realized long term capital gains due to the sale of land or property should consider investing in capital gains bonds.


Who should not invest in capital gains bonds?

Investors who have realized long-term capital gains from selling land/property can invest in capital gains bonds. Other investors cannot invest in these bonds even if interested.

Can NRIs invest in capital gains bonds?

Yes, NRIs are eligible to invest in capital gains bonds and claim tax exemption if they have realized long term capital gains from the sale of land/property.


Capital gains bond interest rates

Presently, the interest rate offered by capital gains bonds is 5%. The interest is paid out annually or once a year.


What is the limit of investing in capital gains bonds?

Eligible investors can invest only up to Rs. 50 Lakh in capital gains bonds in a given financial year. The minimum investment required at a time is Rs. 10,000. Additionally, to avail of benefits under section 54EC, it is critical that investment is done within 6 months of the sale of the asset.


Capital gains bond lock-in period

Capital gains bonds have a lock-in period of 5 years from the investment time. Capital gains bonds cannot be sold until the bond's maturity date. 


What is the taxation of capital gains bonds?

Capital gains bonds are unlisted. Hence the following taxation applies on these bonds.

Taxation on interest of capital gains bonds: Interest earned from capital gains bonds is added to your annual income and taxed as per your marginal income tax slab rate.


Taxation on capital gains of capital gains bonds: Since it is not possible to transfer the bonds before maturity, there is no capital gains that can be realized by selling these bonds. Hence, capital gains taxation is not applicable.


Why are capital gains bonds called 54EC bonds?

Capital gains bonds are mentioned under Income Tax section 54EC. Hence, capital gains bonds are also called 54EC bonds.

Who can issue capital gains bonds?

54EC bonds can be issued only by specific government-backed companies. These are REC (Rural Electrification Corporation), PFC (Power Finance Corporation), NHAI (National Highways Authority of India) and IRFC (Indian Railways Finance Corporation.


Risks of investing in capital gains bonds

The credit default risk of these bonds is extremely low since the issuers are government-owned and controlled public sector companies. However, the interest rate that these bonds offer is quite low: 5%. There is a high risk of losing money to inflation on a post-tax (or even pre-tax) basis.


Advantages of investing in capital gains bonds

The primary advantage of investing in capital gains bonds is the investor gets to enjoy tax exemption of up to Rs. 50 Lakh in a financial year. Another advantage is the highest safety of the bonds because the issuers are government owned PSUs. Since these bonds cannot be liquidated before maturity, it eliminates the price risk and liquidity risk that is associated with other bonds if they are traded or sold before maturity.


How to identify the best capital gains bonds?

There are very few capital gains bonds options at any given time. And barring the issuer, all the other aspects of capital gains bonds are standard - maturity period, interest rate etc. Hence, there are no best capital gains bonds. Investing in any capital gains bonds will do the job for eligible investors.

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Still got questions? We’re here to help.

54EC capital gains bonds are issued on an on-going basis. You can purchase them from your demat account or from the respective issuer’s website.
If you invest in capital gains bonds 6 months after the sale of your capital asset, then you will not get the benefit offered by these bonds.
This question doesn’t have a straightforward answer. It is best to consult a professional investment advisor who can assess your financial situation and provide useful advice.