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
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).
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.