Welcome to our Capital Gains Bond blog page. We provide a full range of investment options that will help you save money on capital gain taxes and earn profitable returns.
What Are Capital Gain Bonds?
Capital Gain Bonds are financial instruments designed to help investors in reducing their
long-term capital gains tax under Section 54EC of the Income Tax Act, 1961 . By
investing the gains from the sale of a long-term capital asset into these bonds, you can
claim exemption on the taxable amount, up to ₹50 lakhs in a financial year.to help
investors in reducing their long-term capital gains tax.
Key Features of Capital Gain Bonds
| Feature |
Details |
| Eligible Under |
Section 54EC of the Income Tax Act |
| Maximum Investment Limit |
₹50 lakhs in a financial year |
| Rating |
AAA |
| Lock-in Period |
5 years (non-transferable and non-tradable) |
| Mode of Holding |
Demat and Physical |
| Interest Rate |
Currently around 5.25% p.a. (subject to change) |
| Interest Payout |
Annually |
| Capital Protection |
High – backed by government-owned enterprises |
List of Capital Gain Bonds in 2025
As of now,the four companies listed below are currently permitted to issue 54EC Capital Gain Bonds -
- 1. REC Limited (Rural Electrification Corporation)
- 2. PFC Limited (Power Finance Corporation)
- 3. HUDCO (Housing and Urban Development Corporation Ltd)
- 4. IRFC (Indian Railway Finance Corporation)
Who Can Invest?
Capital Gain Bonds are suitable for -
- • Individuals who have sold real estate or land.
- • HUFs, partnership companies, or firms with long-term capital gains.
- • Senior citizens looking for tax-saving, low-risk instruments.
- • Anyone who wants to claim exemption from capital gains tax under Section 54EC.
What are the Tax Benefits Under Section 54EC
If you have made a long-term capital gain from the sale of an immovable property (held for more than 2 years), you can invest ₹50 lakhs in Capital Gain Bonds within 6 months from the date of sale. This investment allows you to get a full exemption on the invested amount.
For example, if your gain is ₹45 lakhs, investing that entire amount in 54EC bonds can save you from paying any capital gains tax.
How to Invest in Capital Gain Bonds
Investing in Capital Gain Bonds is simple and hassle-free. You can do it in the following ways:
• Online: Access the RR Finance Capital Gain Bonds page, select the bond issuer (REC, PFC, HUDCO, or IRFC), and make the investment process easy through a few steps online.
• Offline: Download the application form from our website, complete it, and submit it at any of our nearest RR Finance branches. In case you need assistance, do not hesitate to call us or visit any of our offices — our advisors will assist you personally.
Download Capital Gain Bonds Form
Required Documents for Capital Gain Bonds
- • PAN card
- • Address proof
- • Copy of sale deed (as proof of asset transfer)
- • Filled application form
- • Payment details (Cheque/DD or online transaction reference)
Benefits of Capital Gain Bonds
- • Relief from capital gain tax under Section 54EC.
- • Backed by government-owned entities, making them low-risk.
- • Easy investment process, both online and offline.
- • Fixed annual interest income.
Final Thought
In 2025, Capital Gain Bonds continue to be one of the most effective tools for saving long-term capital gains tax. With trusted issuers like REC, PFC, HUDCO, and IRFC, investors have multiple safe and compliant options.
If you're looking to protect your capital gains and invest in a low-risk, tax-saving instrument, Capital Gain Bonds under Section 54EC remain a highly recommended route.
Frequently Asked Questions (FAQs)
Yes, you can make multiple investments in the same or different issuers as long as the total amount does not exceed ₹50 lakhs in one financial year.
Any investment above ₹50 lakhs in a financial year is not eligible for tax exemption under Section 54EC. Interest will still be paid on the excess amount, but it won’t reduce your tax liability.
Currently, NRIs are not allowed to invest in Section 54EC bonds.
Yes, they are considered low-risk as they are issued by government-backed entities like REC, PFC, HUDCO, and IRFC. However, they do carry interest rate risk, meaning rates can change for future investors.
Yes, you can invest in 54EC bonds within 6 months from the date of sale of the asset, even if you’ve already filed your Income Tax Return. However, to claim the exemption, you must revise your ITR to reflect the investment.