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Capital Gain Bond

Caught in a tax tangle as you have just sold your property? Did you know as per the income tax rules, if you have made long term capital gain by selling a property you held for three years, you have to pay a 20% tax?

Like other earning, if you too have made a capital gain by selling your residential property, you are liable to pay tax. Fortunately here, if you don't want to pay your gains in taxes, you have an opportunity to buy capital gain bonds. Yes, you heard correctly. Tax saving on long-term capital gains is possible by investing the capital gain amount in specified bonds, referred as capital gain bonds.

Capital gains bonds are issued by specified institutions and tax benefits are available under Section 54EC of the Income Tax Act. An investor need not to pay any tax on long-term capital gains arising on sale of asset, if the amount of gains are invested in certain specified bonds.


  • Investment amount is minimum of Rs 10,000/- and maximum of Rs 50 lakh
  • Interest rate is 6% payable annually
  • The bonds holds a tenor of three years that can be redeemed at maturity
  • No or minimum risks
  • No tax deductible at source on the interest paid by bonds
  • Nomination facility
  • Holdings can be single as well as jointly

To know more on capital gain bonds, contact us straightaway!