HT Image
HT Image

Option to save taxes: 54EC bonds

There is option available to save some taxes by investing in capital gains bonds. These are known as Section 54EC bonds. Arnav Pandya tells more....
By Arnav Pandya | Hindustan Times, New Delhi
UPDATED ON JUN 09, 2008 10:29 PM IST

There is option available to save some taxes by investing in capital gains bonds. These are known as Section 54EC bonds because the benefit for the investor comes under this section. There are a few factors that need to be considered while looking at investments in these bonds.

Face value

The face value of the bond is very important. There are only a couple of financial institutions that can issue this bond and these are the Rural Electrification Corporation (REC) and the National Highway Authority of India (NHAI).

The face value of these bonds is not low and the investor will need to spend a certain minimum amount.

The face value is generally Rs 10,000, so for an investor wanting to save Rs 8,000 on capital gain will still have to purchase this one bond to get the benefit.

Low interest rates

The investor should not consider this bonds from the point of view of the returns that they will generate. The rate of return will not be high and it currently averages around 5.5 - 5.75 per cent.

The figure is low, especially when one considers tax to be paid on this amount and hence the returns should not be the main feature of this investment.

The return is kept low because investors have no choice but to invest in these bonds as they want to save capital gains and there is no other alternative available in the market.

Lock in period

Another factor that has to be considered about these bonds is the lock in period. This will be for 3 years. The lock in has to be differentiated from the tenure of the bonds that can be higher. This means that the bond can be in existence for a period of 5 years but for 3 years the investor cannot exit the bond.

Further, at the end of this period one has to see carefully as to who has the right to redeem the bond and the steps that needed to be taken for the purpose.

Usually a redemption request has to be given a month or two in advance for the necessary option to be exercised.

Maximum amount

There is another problem that the investors will face if there is a very large capital gain and they wish to save the entire amount through purchase of these bonds.

This is because the maximum amount that can be invested in these bonds has been capped at Rs 50 lakh so that the investor cannot invest more than this. This becomes a restricting factor that has to be considered while taking the investment decision.

SHARE THIS ARTICLE ON
app
Close
Imports expanded 7.56% last month, the first time in 10 months, while exports grew 0.14%—leaving a trade deficit of $15.44 billion, according to data released by the commerce ministry on Friday.(Bloomberg)
Imports expanded 7.56% last month, the first time in 10 months, while exports grew 0.14%—leaving a trade deficit of $15.44 billion, according to data released by the commerce ministry on Friday.(Bloomberg)

India’s trade deficit at 25-month high in Dec

By HT Correspondent | Livemint
UPDATED ON JAN 16, 2021 12:32 AM IST
India’s merchandise trade had been weakening even before the pandemic hit the economy and external demand. Since March 2020, both exports and imports started declining in high double digits, even temporarily leading to a trade surplus in June for the first time in 18 years.
Close
Refunds issued are received within 20-45 days from the date of completion of processing of ITR by the Centralized Processing Centre (CPC).(HT FILE PHOTO )
Refunds issued are received within 20-45 days from the date of completion of processing of ITR by the Centralized Processing Centre (CPC).(HT FILE PHOTO )

How to check income tax refund status online. Read here

By hindustantimes.com | Edited by Shankhyaneel Sarkar, Hindustan Times, New Delhi
PUBLISHED ON JAN 15, 2021 11:37 PM IST
  • Income tax refund (ITR) status can be checked on the National Securities Depository Limited (NSDL) website as well as on the income tax department’s e-filing site.
Close
U.S. industry operated at 74.5per cent of capacity in December, still below the pre-pandemic rate of 76.9per cent in February.(Representative image)
U.S. industry operated at 74.5per cent of capacity in December, still below the pre-pandemic rate of 76.9per cent in February.(Representative image)

US industrial production jumps 1.6 per cent in December

AP
UPDATED ON JAN 15, 2021 11:19 PM IST
The December gain in industrial output followed a 0.5per cent increase in November and a 1 per cent increase in October, the Federal Reserve reported Friday.
Close
The Signal messaging app logo is seen on a smartphone, in front of the same displayed same logo, in this illustration. (REUTERS)
The Signal messaging app logo is seen on a smartphone, in front of the same displayed same logo, in this illustration. (REUTERS)

Signal sees global outage, company says 'working hard to restore service'

Written by Meenakshi Ray
UPDATED ON JAN 15, 2021 11:18 PM IST
Site status tracker DownDetector showed there were 2,167 reports about the issue as users reported they could open the app and send messages but were being delivered later.
Close
The Signal messaging app logo is seen on a smartphone.(REUTERS)
The Signal messaging app logo is seen on a smartphone.(REUTERS)

Messaging app Signal experiencing technical difficulties

Reuters
UPDATED ON JAN 15, 2021 10:48 PM IST
Signal has seen a rise in downloads following a controversial change in rival messaging app WhatsApp's privacy terms, which required WhatsApp users to share their data with both Facebook Inc and Instagram
Close
Bengaluru is also ranked sixth for the world’s tech venture capitalist (VC) investments, on a global list topped by Beijing and San Francisco, New York, Shanghai and London making up the top five.(PTI File)
Bengaluru is also ranked sixth for the world’s tech venture capitalist (VC) investments, on a global list topped by Beijing and San Francisco, New York, Shanghai and London making up the top five.(PTI File)

Bengaluru emerges as world’s fastest growing tech hub, London second: Report

PTI, London
PUBLISHED ON JAN 15, 2021 10:37 PM IST
The UK capital of London registered an impressive three times growth between 2016 and 2020, rising from USD 3.5 billion to USD 10.5 billion.
Close
The PIL said the ministries of commerce and finance control and regulate the export policies and decide as to under which Harmonized System (HS) Codes each good will be exported.(MINT ARCHIVE)
The PIL said the ministries of commerce and finance control and regulate the export policies and decide as to under which Harmonized System (HS) Codes each good will be exported.(MINT ARCHIVE)

SC asks Govt's, 61 firms' reply on PIL alleging duty evasion in iron ore exports

PTI, New Delhi
PUBLISHED ON JAN 15, 2021 09:39 PM IST
A bench headed by Chief Justice S A Bobde took note of submissions of lawyer and PIL petitioner ML Sharma that companies be prosecuted for alleged evasion of export duty by declaring wrong tariff code to export iron ore.
Close
PVR said even post reopening, the combination of staggered state wide reopening, capacity restrictions and limited movie releases impacted the admit levels while costs continue to be incurred.( Harsimar Pal Singh/Hindustan Times)
PVR said even post reopening, the combination of staggered state wide reopening, capacity restrictions and limited movie releases impacted the admit levels while costs continue to be incurred.( Harsimar Pal Singh/Hindustan Times)

PVR reports net loss of 49 crore in Q3

PTI, New Delhi
PUBLISHED ON JAN 15, 2021 09:03 PM IST
Revenue from operations during the period under review stood at 45.10 crore, down 95.04 per cent from 915.74 crore in the corresponding quarter a year ago.
Close
The regulator made it clear that carrying passengers as well as cargo in the passenger compartment at the same time is not allowed.(Representative image)
The regulator made it clear that carrying passengers as well as cargo in the passenger compartment at the same time is not allowed.(Representative image)

DGCA issues guidelines on carrying cargo in passenger compartment of aircraft

PTI, New Delhi
UPDATED ON JAN 15, 2021 07:44 PM IST
"Operator intending to carry cargo in passenger compartment shall apply to DGCA at least 10 days prior to the proposed commencement of operations," the regulator said in its guidelines.
Close
With less than five weeks before the UK’s transition period ends, Brexit negotiations are in their final stages.(AP file photo)
With less than five weeks before the UK’s transition period ends, Brexit negotiations are in their final stages.(AP file photo)

Stuck in Kent: How Brexit red tape strangled cross-border trade

Bloomberg
UPDATED ON JAN 15, 2021 07:30 PM IST
Britain’s logistics industry had warned that businesses would need to hire an additional 50,000 workers to process the 200 million extra customs forms that will be required annually after Brexit.
Close
A coronavirus information sign is displayed by a bus stop in London. (AP Photo)
A coronavirus information sign is displayed by a bus stop in London. (AP Photo)

UK prepares for another recessions as lockdowns cripple economy

AP, London
PUBLISHED ON JAN 15, 2021 07:09 PM IST
  • Because of the November fall, the economy is set to contract again in the fourth quarter.
Close
The headquarters of European Central Bank (ECB) is photographed as the spread of the coronavirus disease (COVID-19) continues during an extended lockdown in Frankfurt, Germany, January 14, 2021. REUTERS/Kai Pfaffenbach(REUTERS)
The headquarters of European Central Bank (ECB) is photographed as the spread of the coronavirus disease (COVID-19) continues during an extended lockdown in Frankfurt, Germany, January 14, 2021. REUTERS/Kai Pfaffenbach(REUTERS)

Banks in Europe yet to fully feel pandemic’s impact, warns ECB

Bloomberg
PUBLISHED ON JAN 15, 2021 04:19 PM IST
A key challenge is that companies propped up by government support measures in 2020 could find themselves in vulnerable financial positions as those programs are withdrawn.
Close
The committee members comprise four RBI officials and two external experts.(Photo: Mint)
The committee members comprise four RBI officials and two external experts.(Photo: Mint)

RBI drains 2 trillion in a bid to nudge shorter rates higher

Bloomberg
PUBLISHED ON JAN 15, 2021 04:08 PM IST
The RBI is draining excess cash after money-market rates crashed way below its 3.35%-4.00% interest-rate corridor late last year, spurring calls from investors for it to remedy a situation that could distort banks’ asset pricing.
Close
The company board also declared an interim dividend of 25 per cent ( <span class='webrupee'>₹</span>2.50 per share) for financial year 2020-21.(Mint file photo)
The company board also declared an interim dividend of 25 per cent ( 2.50 per share) for financial year 2020-21.(Mint file photo)

GAIL announces 1,046.35 crore share buyback

PTI, New Delhi
PUBLISHED ON JAN 15, 2021 03:25 PM IST
The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit.
Close
A person walks along a train platform at Waterloo station, amid the coronavirus disease (Covid-19) outbreak, in London, Britain.(REUTERS)
A person walks along a train platform at Waterloo station, amid the coronavirus disease (Covid-19) outbreak, in London, Britain.(REUTERS)

UK economy pushed into reverse by November lockdown

Reuters
PUBLISHED ON JAN 15, 2021 03:03 PM IST
The 2.6% monthly decline was much smaller than most analysts expected - a Reuters poll had pointed to a 5.7% contraction - but several economists said Britain was still likely to suffer a double-dip recession.
Close
SHARE
Story Saved
OPEN APP