Capital Gain Bonds

Capital Gain Bonds, also known as 54EC bonds are investment option available that allows tax payers to reduce their long term capital gain tax liability. The capital gains earned from selling an asset like land or building can be invested in Capital gain Bonds to get capital gain tax exemption under Section 54EC.The investor can choose to get exemption from this long term capital gain tax in 2 ways:

Within a period of one year before or two years after the date of transfer of old house, the tax payer should acquire another residential house or should construct a residential house with in a period of three years from the date of transfer of old house.
By investing in 54EC bonds, or capital gains bonds within 6 months of the date of sale of asset, which is another way to save long-term capital gain tax arising out of sale of capital asset.

Key Features of Capital Gain Bonds

Tenure	5 years
Rate of Interest	5.25% p.a. payable annually
Taxation	Interest is taxable although no TDS is deducted
Redemption	Automatic Redemption after 5 Years
Mode of Holding	Physical or Demat
Min Investment	2 Bonds (Rs. 20,000/-)
Max Investment	500 Bonds (Rs. 50,00,000/-)

IFIN-SIB partnership for the distribution of Capital Gain Bonds
South Indian Bank has been enrolled as a Channel Partner for the distribution of Capital Gain Bonds through our tie up with IFIN- a subsidiary of IFCI (Industrial Financial Corporation of India) Financial services Limited.
Capital Gain bonds available are:

REC (Rural Electrification Corporation Ltd)
PFC (Power Finance Corporation Ltd)
IRFC (Indian Railways Finance Corporation Limited)

These are AAA Rated Bonds indicating that they are highly stable and the face value of each bond is Rs. 10,000.

Conditions to be met to avail tax exemptions under Section 54 EC of the Income Tax Act, 1961

The exemption on investment is allowed only against long term capital gains on the sale of the immovable property (i.e. sale of land or building or both).
The investment in the aforesaid bonds should be made within 6 months from the date of sale of the immovable property
The maximum amount that can be invested in these types of bonds is Rs 50, 00,000/- during the financial year.
The full amount has to be paid upfront along with the application
Such investment can be redeemed/ withdrawn only after 5 years

For further details, please contact any branch of South Indian Bank or Retail Banking Department of the Bank.

Contact Address:
Retail Banking Department, The South Indian Bank Ltd., 7th Floor, Do.No. 702
Administrative Building-2, Rajagiri Valley, Near Infopark Expressway
Kakkanad, Kochi
Kerala Pin Code: 682039
Ph: 0484- 2771346
Email: [email protected]

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