54EC capital gains bonds

What are 54EC bonds and who issues them?

They are capital gains bonds issued by REC, PFC, IRFC and HUDCO, all rated AAA, that pay 5.25% a year (ICICI Direct). Investors buy them to claim exemption on a capital gain under section 54EC, which is section 85 under the Income-tax Act 2025 (SEBI circular, 14th Aug 2026).

Which gains qualify and the deadline to invest after a sale are not covered in the sources we used. Confirm both against the Act or with the issuer before you invest.

What is the minimum, maximum and lock-in for 54EC bonds?

The bonds come in units of ₹10,000, with a maximum of 500 bonds (₹50 lakh), a 5 year lock-in and no premature redemption or transfer (ICICI Direct). The minimum depends on where you look:

Sources: ICICI Direct; Bonds Kart. ICICI Direct states one minimum of 2 bonds for all four issuers; Bonds Kart's page, read on 17th Oct 2026, shows ₹10,000 for IRFC. Confirm the figure that applies with the issuer or platform. Whether the ₹50 lakh cap applies per financial year is not covered in our sources.

Where can you buy 54EC bonds?

Online, through a few brokers and bond platforms. ICICI Direct lists all four issuers with terms (ICICI Direct). Among OBPPs, Bonds Kart lists IRFC, PFC and REC (Bonds Kart), and IndiaBonds, Aspero and Altifi list capital gain bonds on their sites (IndiaBonds; Aspero; Altifi). GoldenPi runs a capital gain bonds collection (GoldenPi), and Digifinn added 54EC bonds with its Sep 2026 rebrand (Loktej). HDFC Securities lists 54EC bonds without terms (HDFC Securities).

OBPPs were formally allowed to offer 54EC bonds by SEBI's circular of 14th Aug 2026, which requires a disclaimer that grievances lie with the issuer rather than SEBI, and disclosure of the lock-in, limits and non-transferability (SEBI circular). SEBI's May 2026 consultation paper noted that "few OBPPs are willing to offer" these bonds (SEBI consultation paper).

Platform profiles: ICICI Direct, HDFC Sky, Bonds Kart, IndiaBonds, Aspero, Altifi, GoldenPi, Digifinn. The criteria based list is at where to buy 54EC bonds.

How is 54EC bond interest taxed?

At your slab rate, with no TDS deducted, per ICICI Direct (ICICI Direct). The exemption covers the capital gain you invest, not the interest the bonds pay, so in a high slab the post tax yield is well below 5.25%. For the general rules see how is bond interest taxed and is TDS deducted on bond interest.

What does this page not cover yet?

Several rules investors ask about most are not in the sources we used, so we do not state them: the time limit to invest after the sale of the asset, which capital gains qualify, whether the ₹50 lakh cap is per financial year, how often interest is paid, whether NRIs can apply, and whether the bonds are issued in demat or certificate form. Confirm each with the issuer or a tax adviser. The questions retail investors ask about 54EC bonds are collected in 54EC bonds: where to buy, limits and lock-in.