How to invest in 54 EC capital gain tax exemption bonds online in 4 steps

Here is a guide that will tell you how you can apply online for 54EC CGTE bonds and pay through net banking / debit card either through a broker, or directly

Kumar Shankar Roy Aug 17, 2020

Tax exempt fundsHere is a guide that will tell you how you can apply online for 54EC Capital Gains Tax Exemption bonds and pay through net banking / debit card either through a broker, or directly.

We received this query:

I am planning to sell our old property. I want to invest in 54EC bonds. Is there any online procedure to invest? I want to invest this money as i don’t want to reinvest in property and also don’t want to pay tax — Amol Chavan

Our Answer: 54EC bonds are specifically meant for investors earning long-term capital gains. By investing in these bonds, you can get tax exemption on the long-term capital gains. Since the tax deduction is available under section 54EC of the Income Tax Act, they are called 54EC bonds.

In this article, we will discuss how you can invest in such bonds, which are usually floated by 3-4 companies including REC, PFC and IRFC.

Before we begin the online process, the investor should be having the following information ready and documents available in PDF format.

a. Investor email ID
b. Investor mobile
c. Self attested ID proof (PDF only)
d. Self attested address proof (PDF only)
e. Cancelled cheque for physical bond securities application

The online facility to invest in 54EC bonds is provided by Karvy for 3 bond issuers.

Investment via broker

Step 1

1. Click the “Fill a New Form online” button for the bond issuer you prefer.

2. Fill the application form online and submit.

3. You will get an SMS on successful application submission.

4. Download the duly filled application form.

5. Take a print out of the above form and attest the signatures by all applicant(s).

6. Scan the application copy duly signed by all applicant(s) and save as PDF format.

Step 2

7. Click the “upload Application/KYC documents” button.

8. Enter the following application details as submitted online to validate the application form.

a. Your application number

b. Your email ID

c. Your mobile number

9. Click “Get OTP” button – to receive an OTP on your email and mobile.

10. Enter OTP received on mobile / email ID and click “Validate”.

11. On validation, the application information will be displayed.

Step 3

12. Upload the following valid PDF documents to proceed for payment

a. The application form duly signed

b. ID proof (self attested)

c. Address proof (self attested)

d. Others If any / Cancelled Cheque for Physical Holders

13. On upload of above documents, it will enable the payment

gateway “Proceed to Payment” button.

Step 4 (Online payment)

14. Pay through Netbanking / Debit Card

15. On success or failure of the payment, the acknowledgement will be generated and the same will be sent through email.

Direct investment

For investors, who want to do all the steps of application to payment on your own (without a broker), here is a small guide. We have given the process for REC bonds. The process is similar for others like PFC and IRFC

1. Download REC bond form here –

https://kosmic.kfintech.com/REC/download_applns.aspx

2. In the download page, please choose ‘direct’ option.

3. Once you select the number of forms to download, enter the captcha.

4. The form pack will be downloaded in ZIP format.

5. Unzip the file and you will see a PDF of the actual form (marked as private and confidential).

6. Fill up the form and arrange the required documents on your own.

7. Investors are required to submit the Application Form duly filled along with either a Demand Draft or account payee Cheque payable in favour of “REC Ltd- 54EC” or “Rural Electrification Corporation Limited – 54EC Bonds” along with necessary enclosures at the designated branches of collecting banks – Axis Bank, Canara Bank, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank or Union Bank.

You can also directly deposit the amount in the REC collection account by way of NEFT/RTGS and invariably fill the application forms as given on REC website and mention the UTR no. at space provided in the application form. To do the fund transfer, here are the bank account details.

Bank – HDFC Bank
Bank account – 00030350000584
IFSC – HDFC0000003
MICR number – 110240001
Branch address – G – 3/4 , 19 K G Marg, Surya Kiran Building, New Delhi – 110001

8. For status of allotment/ servicing or any other details, please visit http://www.recindia.nic.in/capital-gain-tax-exemption or contact RTA/ REC Investors Services Cell at 011-43091527 or 011-24361320.

Related:

54 EC bonds of REC cuts interest rate to 5% from Aug 1
With the 5-year tenure, is 54EC bonds a good option to save on capital gains?
PFC’s capital gains tax bonds help you save on taxes from real estate

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.

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