Capital Gain Bonds come under section 54 EC of Income Tax Act, 1961. Capital Gain Bonds, where investors get exemption from Capital Gain tax.
These bonds are being issued as 'Long term specified assets' within the meaning of Explanation (b) to sub-section (3) of Section 54-EC of the Income Tax Act, 1961. Those desirous of availing exemption from capital gain tax under Section 54 EC may invest in these bonds. Capital gain arising from transfer of Long-term capital assets can be invested in these bonds within a period of six months from the date of transfer of the asset for getting exemption from the capital gain tax.
