As per the notification released by Income Tax section 54EC One Can claim Income tax relief by investing the long-term capital gains in the bonds issued by the NHAI or National Highway Authority of India or by the Rural Electrification Corporation Limited (RECL).
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Guidelines for Investment under Section 54EC
- The investment should be made within a period of 6 months from the date of transfer of capital asset and bonds should not be redeemed before 3 years.
- This benefit cannot be availed in respect of short-term capital gain. Maximum amount which qualifies for investment will be Rs. 50,00,000. Thus, deduction under section 54EC cannot be claimed for more than Rs. 50,00,000.
- Interest earn on these bond is taxable
- No need to have the DMAT account for investment in NHAI or RECL bonds
- Investment can be done at any bank branches manually.