New Delhi: The Finance Ministry has extended the time limit for making investments under Section 54EC of the Income Tax Act. The ministry's move has come in the wake of representations made to it that people could not avail themselves of Section 54EC benefits due to non-availability of bonds. Also, it has been the experience of some that the effective time available for making the investment has turned out to be less than six months

The provision provides tax exemption on capital gains arising from the transfer of a capital asset, if such capital gains are invested in certain bonds within a period of six months after the date of such transfer.

The Central Board of Direct Taxes (CBDT) has now said that investments in bonds (recognised under Section 54EC) can be made up to September 30 in the case of persons whose long-term capital asset was transferred between September 29, 2005 and December 31, 2005 (both days inclusive).

For persons whose long-term capital asset was transferred between January 1 and June 30 (both days inclusive), the CBDT has said that investments in recognised bonds can be made up to December 31 for availing themselves of the Section 54EC benefits.

As part of its budget submissions, the Centre had said that Section 54EC benefits would be available, with effect from April 1 only when the capital gains are invested in notified bonds of rural electrification corporation Ltd (REC) and National Highways Authority of India (NHAI). The Rs4,500 crore and Rs1,500 crore bond issues of the REC and NHAI, for the financial year 2006-07, have been notified by the Central Government on June 29.