54EC Bonds: Save ₹1.5L Tax on Your Property Gains

Sold a property and worried about capital gains tax? Section 54EC bonds let you invest up to ₹50 lakh of your profit and pay zero long-term capital gains tax. Here's exactly how to use them before the 6-month deadline.

Here's what happened: Karnataka Bank has been empanelled as an arranger for HUDCO Section 54EC Capital Gain Bonds, making it easier for customers to subscribe at bank branches.. Section 54EC bonds are a tax-saving instrument under the Income Tax Act that allow property sellers to defer or eliminate long-term capital gains tax by investing sale proceeds.. HUDCO (Housing and Urban Development Corporation) is a government-owned entity; its 54EC bonds carry sovereign-backed credibility with a mandatory 5-year lock-in period..

What you should do: Calculate your capital gains: subtract your indexed cost of acquisition from the sale price to know exactly how much you need to invest in 54EC bonds to get full exemption.. Count 6 months from your property sale date immediately — this is your hard deadline to invest in 54EC bonds; approach your bank or visit HUDCO/NHAI/REC websites to subscribe.. Compare 54EC bonds with Section 54 reinvestment in property — if you plan to buy another house within 2 years anyway, Section 54 may save more tax without the 5-year lock-in..

If your property sale falls between October and March, you can invest ₹50 lakh in the current FY and another ₹50 lakh in the next FY within the 6-month window — legally doubling the exemption to ₹1 crore.