NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Under the Income-tax Act, a seller who has a long-term capital gain on land or building can claim exemption by investing in specified bonds (54EC bonds). What is the maximum amount eligible for this exemption?
The maximum investment eligible for exemption through 54EC bonds is ₹50 lakh. The bonds must be bought from the long-term capital gain on land or building and carry a five-year lock-in. Higher or lower amounts are not the statutory cap.
- A₹10 lakh
- B₹25 lakh
- C₹50 lakhCorrect
- D₹1 crore
Explanation
The exemption for investment in specified 54EC bonds, such as those of NHAI, REC or PFC, is capped at ₹50 lakh. The bonds have a 5-year lock-in. A ₹1 crore cap and the lower caps are not provided in the law.
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