Section 54EC → Section 71
Exemption on investment in certain Bonds
Quick Answer
Section 54EC of the Income Tax Act, 1961 (Exemption on investment in certain Bonds) corresponds to Section 71 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 54EC
The starting point is Section 54EC of the Income Tax Act, 1961 — exemption on investment in certain bonds. Exemption up to Rs. 50 Lakhs if long-term capital gains from land/building are invested in NHAI or RECL bonds within 6 months.
The new code maps this to Section 71: the provision is retained and renumbered as Section 71 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. Lock-in period of 5 years remains unchanged.
On the ground, changes to Section 54EC carry a Medium impact. Standard tax-saving avenue for real estate sellers.
Sec 54EC
Provision Summary
Exemption up to Rs. 50 Lakhs if long-term capital gains from land/building are invested in NHAI or RECL bonds within 6 months.
Sec 71
Provision Summary
Retained. Lock-in period of 5 years remains unchanged.
Key Changes & Highlights
- Bond issuance completely digitized. Demat account linking made mandatory for claiming the exemption.
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Frequently Asked Questions
What does Section 54EC of the Income Tax Act 1961 deal with?
Section 54EC of the Income Tax Act, 1961 covers exemption on investment in certain bonds. Exemption up to Rs. 50 Lakhs if long-term capital gains from land/building are invested in NHAI or RECL bonds within 6 months.
Where does Section 54EC of the ITA 1961 go under the Income-tax Act, 2025?
Section 54EC of the Income Tax Act, 1961 maps to Section 71 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Lock-in period of 5 years remains unchanged.
Why does the change to Section 54EC matter for taxpayers?
The transition impact for Section 54EC is rated Medium. Standard tax-saving avenue for real estate sellers.
What are the key changes to Section 54EC under the Income-tax Act, 2025?
Bond issuance completely digitized. Demat account linking made mandatory for claiming the exemption. These points are specific to Section 54EC (Exemption on investment in certain Bonds).
Disclaimer: This mapping of Section 54EC (Exemption on investment in certain Bonds) to Section 71 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 54EC is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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