54EC bonds, commonly referred to as Capital Gains Bonds, are one of the ways to save long-term capital gain tax. 54EC bonds are specifically meant for any person (individuals, HUFs, partnership firms, companies etc.). You can avail exemption in respect of long-term capital gains arising from the sale of residential property, if the capital gain is invested in the Capital Gain Bonds.
The exemption will be the amount of capital gain or the amount of investment made, whichever is less. The exemption is subject to :
The eligible bonds under Section 54EC are REC (Rural Electrification Corporation Ltd), PFC (Power Finance Corporation Ltd), NHAI (National Highways Authority of India) and IRFC (Indian Railways Finance Corporation Limited).