Capital Gain Bonds 54EC - RR Finance

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CAPITAL GAIN BONDS 54EC

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OVERVIEW

Section 54EC bonds have an interest rate of 5.75 percent. Annual interest is earned. Bond interest is taxable.

Capital gain bonds are AAA-rated and secure. Because they are backed by public-sector enterprises, the default rate is low.

Tenure: You can invest in these bonds for five years, which is also the lock-in period.

Transferability: The 54EC bonds cannot be transferred from one person to another at any time.

Investment limit: You must buy at least one bond worth Rs. 10,000. The maximum is 500 bonds worth Rs. 50 lakh per year.

FEATURES OF TAX-FREE BONDS

Capital-gains bonds are safe, secure, and pay a reasonable interest rate. H are some of the main characteristics of the 54EC bonds.

The interest rate on the section 54EC bonds is 5.75 percent. Annual intere paid. The interest on the bonds is taxable.

Capital gains bonds are AAA-rated and secure. Because they are supporte public-sector enterprises, the default rate is low.

Tenure: You can invest in these bonds for a period of five years, which serves as the lock-in period.

Transferability: At any time, the 54EC bonds cannot be transferred from person to another.

Investment limit: You must invest in at least one bond worth Rs. 10,000. annual limit is 500 bonds worth Rs. 50 lakh.

ADVANTAGES OF TAX-FREE GOVERNMENT BONDS

Section 54EC bonds have a number of advantages. Here are four compe reasons to invest in capital gain bonds:

Exemption from capital gains taxes: The primary advantage of this produc that it allows you to save money on capital gains taxes. The exemption is for lesser of the capital gain or the amount of investment made. Guaranteed income: Your investments will earn an annual interest rate of percent. As a result, you can be confident in the income generated by y investment in 54EC bonds.

Accessibility: You can hold 54 EC bonds in either demat or physical form. The government of India backs capital-gains bonds, making them a s investment. You can invest in these bonds without worrying about returns.

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