Name Minimum
Interest for
60 months
NHAI 10,000 Annual 5.75%
IRFC 10,000 Annual 5.75%
REC 20,000 Annual 5.75%
PEC 10,000 Annual 5.75%
  • 7.75% Taxable Bonds
  • SBI
  • HDFC & Axis
  • Housing & Urban Development Corporation Ltd. (HUDCO)

Invest Money in Government of India Tax Saving Bonds.

54 EC Capital Gains Bonds 


Under Section 54 EC of Income Tax, 1961 an investor need not pay any tax on any long-term capital gains arising on sale of any asset, if the amounts of capital gains are invested in certain specified bonds.

Rural Electrification Corporation Limited (REC), National Housing Bank NHB), SIDBI and NABARD are permitted to issues capital gains bonds under Section 54 EC.

Some key features of Section 54 EC bonds are:

  • Highest credit rating of AAA by CRISIL, CARE and FITCH.
  • Interest is taxable although no TDS is deducted.
  • Lock-in of around 3 years and non- transferable.
  • Minimum amount of investment Rs 10,000 and multiples.

Rural Electrification Corporation

REC was incorporated in 1969 as a wholly owned subsidiary of Government of India. Its main objective is to finance and promote rural and other electrification projects all over the country. It also provides financial assistance to State Electricity Boards, State Government Departments, Private Sector and other entities in the power sector.

The corporation has sanctioned financial assistance of Rs 63,380 crs under 40,694 projects till March 2004.

 Instruments details
Face Value
: Rs 10,000
Payment of interest: 31st March every year
Nature of bonds: Secured non-convertible Redeemable Taxable Bonds secured by way of immovable property  

National Housing Bank (NHB):

National Housing Bank was established in July 1988 under an Act of the Parliament viz. the National Housing Bank Act, 1987 to function as a principal agency to promote Housing Finance Institutions and to provide financial and other support to such institutions. The Act, inter alia, empowers NHB to issue directions to housing finance institutions to ensure their growth on sound lines


SIDBI was established in 1980 as a wholly owned subsidiary of IDBI. Its objectives are to serve as the principal financial institution for promotion, financing and development of industry in the small-scale sector.

The cumulative sanctions upto March 2004 aggregated Rs 94,404 crs and cumulative disbursements aggregated Rs 63,515 crs. During FY04 sanctions were Rs 8246 crs while disbursements were Rs 4414 crs.

Instruments details
Face Value
: Rs 10,000
Payment of interest: 1st June every year
Nature of bonds: Unsecured non-convertible Redeemable Taxable Bonds

Instruments details
Face Value
: Rs 10,000
Payment of interest: 1st June every year
Nature of bonds: Unsecured non-convertible Redeemable Taxable Bonds


NABARD was established in 1982 and is a wholly owned subsidiary of RBI. It is mandated to provide credit for the promotion of agriculture, small-scale industry, and cottage and village industry. It is mainly engaged in providing refinance to Commercial, Cooperative, and regional rural Banks or their lending to agriculture, small scale and allied activities.

Senior Citizens Savings Scheme:

Government of India launched a new savings scheme has been exclusively for senior citizens to mitigate the problems faced by them on account of falling interest rates in the past few years.

The main features are as follows: –

  • Citizens of 60 years of age and above are eligible to invest. Single or joint account (with spouse only) can be opened.
  • Citizens who have retired under a voluntary or special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions.
  • Deposits in multiples of Rs. 1000 subject to maximum of Rs. 15 lakh will be allowed.
  • The deposits will carry an interest of 9% per annum (taxable).
  • Interest will be payable on 31st March, 30th June, 30th September and 31st December.
  • The maturity period of the deposit will be five years, extendable by another three years.
  • Premature withdrawal after a period of one year will be allowed. In case the account is closed after the expiry of one year but before the expiry of to years 1.5% of the deposit shall be deducted. In case the account is closed on or after the expiry of two years, 1% of the deposit shall be deducted.
  • The investments in the scheme will be non-tradable and non-transferable. However, nomination facility will be available.
  • Non- Resident Indians and Hindu Undivided Families are not eligible to invest in the scheme.
  • Age proof is compulsory.
  • Investment can be made through nearest post office or nationalized banks.

8% RBI Savings Bond

Government of India decided to issue 8% Savings (Taxable) Bonds, 2003 with effect from 21st April 2003.

Eligibility for investment :

The Bonds may be held by –

  • Individual.
  • HUF’s.
  • Charitable Institution.

Limit on Investments : No maximum limit .

Issue Price : The Bonds will be issued at per 1.e. at Rs. 100.00

The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof. Accordingly, the issue price will be Rs. 1000/- for every Rs. 1,000/- (Nominal).

Interest :

The bond will be issued in cumulative / non cumulative from, at investor’s option.

The Bond will bear interest at the rate of 8% per annum. Interest on non-cumulative bonds will be payable at half-yearly intervals from the date of issue. Interest on cumulative bonds will be compounded with half-yearly rests and will be payable on maturity along with the principal. Interest to the holders opting for non-cumulative will be paid from date of issue upto 31st July/31st January, as the case may be and thereafter at half-yearly for period ending 31st July/31st January on 1st August and 1st February.
Interest on bonds will be paid, by cheque/warrant or through ECS by credit to bank account of the holder as per the option exercised by the investor/holder.

Tax Treatment :

Interest on the Bonds will be taxable under the Income-Tax Act, 1961 as applicable according to the relevant tax status of the bond holder.

Repayment :

The Bonds shall be repayable on the expiry of 6 years from the date of issue. No interest would accrue after the maturity of the Bond.

T D S :

No tax will be deducted at source while making payment of interest on the cumulative and non-cumulative Bonds from time to time.

Nomination :

A sole holder or a sole surviving holder of a bond, being an individual, may nominate one or more persons who shall be entitled to the Bond and the payment thereon in the event of his/her death.

Transferability :

The Bond shall not be transferable. Tradeability against Bonds. The Bonds shall not be tradeable in the secondary market and shall be eligible as collateral for loan banks, financial Institutions and Non banking Finincial Companies, (NBFC) etc. Invest your money in Safe Bonds.

Call us to invest in any kind of Bonds.

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