Saturday, June 30, 2012

Savings and Investment Scheme Guide For Indian Poor And Middle Class:Capital Gain Tax Exemption Bond

What Scheme Mean?
The Capital tax exemption bond are bonds in which investments offset the long term capital gains that Investors make on capital gain.


As to be resident of India and made capital gain.

Entry Age
No age Limit

The bond of face value of Rs10,000

6% Per annum

Account Holding Type
Individual,HUF,Partnership,Companies,Corporates,Banks,Mutual funds,FII,Trust,NRI


Tax Benefits
Tax Benefits are based Section 54C conditions(Refer Income Tax Website Section 54C)

How to Join The Scheme/Account/Deposit/Policy?
  • You need to fill the form provided by the bond issuer.
  • You need Self attested copy of PAN card.
  • Photocopy of Cancelled Cheque  for ESC facility.
  • Address and Identity proof.
  • Carry Original Document for verification.

Objective And Risk
The main objective of this three year bond is to avoid paying income tax on Capital gain.Gains made on capital transfer need to be invested in this bond within six months from sale of capital assert in order for the proceeds of such sale to exempted from capital gains tax.

You can time the sale to use the six month investment window in this bond to fall in two different financial years to maximize the savings on the gains that you have made.


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