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Monday, April 18, 2011

Achieved Capital gain, NHAI bonds are the solution

If recently you happened to sell any capital assets (gold or real estate) and not in a mood to pay taxes, just chill, NHAI bonds are the solution to your problem. You can invest your capital gain (with 50 lakh upper limit) in NHAI (National Highways Authority of India) 54 EC capital Gains bonds.
These bonds are non- negotiable and non transferable and can’t be offered as security for any loan or advance.
Important point is that no TDS (Tax Deduction at Source) shall be detected on its interest but interest is added to income and taxable (if applicable).
Investors should keep in the mind that investment should be done in bonds within 6 months from the date of transfer of capital asset.
Bonds secure AAA rating from CRISIL and FITCH.
Face value of each bond is 10,000 and bonds shall be issued at face value. Issuance of Bond is open from first April 2011 till 31 March 2012 if not subscribed before it.
Long term capital gain tax rate is 10% without indexation and 20 % with indexation.
Bonds give 6% interest rate per annum and the interest is paid annually and no compounding is done.
In most cases it is wise to invest in 54 EC capital gains bonds than paying hefty tax.


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