💰 Tax Savings · Capital-gains exemptions
Capital-gains bonds — Section 85 (old 54EC), up to ₹50 lakh
✍️ EaseValue Advisors · Updated 18 Jul 2026 · FY 2025-26
In short
Long-term gain on land or a building? Invest up to ₹50 lakh in NHAI/REC/PFC/IRFC bonds within 6 months and that gain is exempt — Section 85, Income-tax Act 2025 (old 54EC).
The rule
- Applies only to gains on land or building.
- Invest within 6 months of the sale.
- Cap of ₹50 lakh — an overall ceiling (you can't stack two years).
- 5-year lock-in on the bonds.
Ideal when you don't want to buy another house — park up to ₹50 lakh of the gain here and pay tax only on the balance.
Who it helps
Sellers of property who want a simple, no-purchase exemption.
Practical points
- Buy within 6 months of the sale — NHAI/REC/PFC/IRFC 5-year bonds.
- The ₹50 lakh cap is per taxpayer across financial years for the same gain — plan the timing if the gain is larger.
- Interest on the bonds (~5%) is taxable, but the capital gain is saved.
The law behind it
Section 85 (old 54EC)
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
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