What is the time limit for investing in 54EC bonds?

Six months from the date of transfer of the property, within the ₹50 lakh limit for the financial year; if the six months straddle two years, the cap still applies to the gain from one sale in total. Apply early: the bonds are allotted when the money reaches the issuer.

Which bonds qualify under Section 85 (earlier Section 54EC)?

Bonds issued by REC, PFC, IRFC and HUDCO, all AAA-rated public sector issuers. They pay 5.25% a year at present, have a five-year lock-in, and can be held in physical or demat form. NHAI stopped issuing 54EC bonds in 2022.

How is the interest on 54EC bonds taxed?

At your slab rate: the exemption applies to the capital gain you invest, and the 5.25% interest is added to your income each year, with no TDS for resident investors. The bonds are held for the full five years and then repaid at face value.

Can I invest more than ₹50 lakh?

Not for the exemption. The ₹50 lakh cap applies per financial year and to the gain from one asset. A larger gain can use Section 54 (buying a residential house) for the balance, or pay tax on it. Each co-owner of a jointly held property can invest up to ₹50 lakh against their own share.

How are 54EC bonds held?

In physical form with your PAN, a self-attested address proof and a cancelled cheque, or in demat if you prefer. Sanriya's bond pages carry each issuer's form, a filled sample and the broker codes that let us track the application to allotment.

Financial calculators54EC Capital Gains Tax Calculator

54EC Capital Gains Tax Calculator

See the capital gains tax you can save with 54EC bonds after selling property.

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Long-term capital gain₹30 lakh

Invested in 54EC bonds: ₹30 lakh
Interest over 5 years: ₹7.88 lakh; Taxable, paid yearly
Tax saved: ₹3.9 lakh

Tax saved₹3.9 lakh 100%
Tax on the restNil 0%

Limit ₹50 lakh a year, within 6 months of sale; 5.25% p.a. for 5 years. Tax shown at 12.5% + 4% cess; confirm your rate with a CA.

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How this calculator works

Enter the long-term capital gain from a property sale. The calculator shows the tax due at the long-term rate, how much of the gain you can place in 54EC bonds (up to ₹50 lakh in a financial year, within six months of the sale) and the tax that saves. The exemption is in Section 85 of the Income-tax Act, 2025 from 1 April 2026 (Section 54EC before that); the bonds lock in for five years and pay a fixed coupon. Confirm your own rate with a CA.

What is a 54EC capital gains tax calculator?

It shows the tax you can save by investing the long-term capital gain from a property sale in 54EC capital gain bonds. Under Section 85 of the Income-tax Act, 2025 (Section 54EC until March 2026), the gain is exempt to the extent it is invested in bonds from REC, PFC, IRFC or HUDCO within six months of the sale, up to ₹50 lakh in a financial year. Enter the gain; it shows the tax due, the amount you can invest and the tax saved.

How is it calculated?

Tax saved = min(Gain, ₹50,00,000) × 12.5% × 1.04

12.5% is the long-term capital gains rate on property sold after 23 July 2024, without indexation
1.04 adds the 4% cess; surcharge may apply above ₹50 lakh of income

A ₹80 lakh gain, ₹50 lakh invested

Long-term capital gain	₹80,00,000
Tax at 12.5% plus cess, with no bonds	₹10,40,000
Invested in 54EC bonds	₹50,00,000
Tax saved	₹6,50,000
Tax still payable on the rest	₹3,90,000
Interest from the bonds	₹2,62,500 a year at 5.25%

Interest is taxable at your slab; the bonds lock in for five years. Confirm your rate with a chartered accountant.

Questions people ask

Six months from the date of transfer of the property, within the ₹50 lakh limit for the financial year; if the six months straddle two years, the cap still applies to the gain from one sale in total. Apply early: the bonds are allotted when the money reaches the issuer.
Bonds issued by REC, PFC, IRFC and HUDCO, all AAA-rated public sector issuers. They pay 5.25% a year at present, have a five-year lock-in, and can be held in physical or demat form. NHAI stopped issuing 54EC bonds in 2022.
At your slab rate: the exemption applies to the capital gain you invest, and the 5.25% interest is added to your income each year, with no TDS for resident investors. The bonds are held for the full five years and then repaid at face value.
Not for the exemption. The ₹50 lakh cap applies per financial year and to the gain from one asset. A larger gain can use Section 54 (buying a residential house) for the balance, or pay tax on it. Each co-owner of a jointly held property can invest up to ₹50 lakh against their own share.
In physical form with your PAN, a self-attested address proof and a cancelled cheque, or in demat if you prefer. Sanriya's bond pages carry each issuer's form, a filled sample and the broker codes that let us track the application to allotment.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Figures are illustrations at an assumed rate, not a forecast. Talk to us to match a plan to your goals.