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Capital gains on sale of house property: Can I split investment in 54EC bonds across two financial years?

Milind Vadjikar |943 Answers |Ask -Follow

Insurance, Stocks, MF, PF Expert - Answered on Sep 07, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more

Asked by Anonymous - Feb 07, 2024Hindi

Capital gains on sale of house property is Rs. 1.00 cr. I want to save tax on this amount. There is limit of Rs. 50 lakhs per financial year for investment in 54EC bonds. Can I invest Rs. 50 lakhs in 54EC bonds in one financial year and another Rs. 50 lakhs in 54EC bonds in the next financial year and avoid paying any tax on the full capital gains of Rs. 1.00 cr? The sale transaction is being done in Feb 2024. So the 6 months timeline for tax saving investments in 54EC bonds is spread over 2 financial years. Please advise.

Ans: According to my understanding this is not allowable per Income Tax Act however recommend you to seek concrete legal interpretation and advice on the matter and proceed cautiously as per documented advice.

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Sir, if my capital gain after indexation for sale of residential property in current financial year is Rs 67 lakh, can I invest Rs 50 lakh in tax saving bonds this year, deposit Rs 17 lakh in capital gains account, and deposit the remaining in tax saver bond from that account in the next financial year? Please advise.

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