Sold a property last month. CA confirmed long-term capital gains of around Rs 38 lakh. Suggested Section 54EC bonds as an option to avoid paying the 12.5% LTCG tax. The 6-month window from sale date has started.
Few things I am unclear on before I move:
Which issuers are currently active? I keep seeing NHAI mentioned but also that they stopped.
Can I buy this on Zerodha or do I need to go somewhere else?
Demat or physical, does it matter?
Disc: not asking for tax advice, just want to understand the mechanics before I proceed.
NHAI stopped accepting applications in September 2022, so cross them off the list. The three active issuers right now are REC, PFC, and IRFC, all government-backed PSUs, all AAA rated. Face value is Rs 10,000 per bond, minimum one bond, maximum 500 bonds which is Rs 50 lakh per financial year. Interest is 5.25% per annum, paid annually, taxable at your slab rate with no TDS. Lock-in is 5 years, non-negotiable. You cannot sell, pledge, or transfer them before that.