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After a sale with long-term capital gains, 54EC lets you put up to ₹50 lakh into specified government bonds within six months. The lock-in and eligible bonds for FY 2026-27 are below.
Section 54EC allows you to claim exemption on long-term capital gains if you reinvest the gains (not the sale proceeds) into specified bonds within 6 months of the sale date.
Sell land or building
s.54EC covers LTCG from land or building only — not gold or equity
Invest gains in bonds
Within 6 months. Amount = LTCG (capped ₹50L)
The exempt amount is the lower of:
Four government-backed entities currently issue 54EC-eligible bonds: REC, PFC, IRFC, and HUDCO (HUDCO notified from April 2025). NHAI stopped issuing 54EC bonds from 1 April 2022. These are ultra-safe, fixed-return instruments.
Rural Electrification Corporation
Power sector bonds
Power Finance Corporation
Power sector bonds
Indian Railway Finance Corporation
Railway infrastructure bonds
Housing & Urban Development Corporation
Housing & urban infrastructure bonds
BOND DETAILS
Interest rate: ~5.25% p.a. (as of 2026, varies by issuer). Tenure: 5 years (lock-in). Interest is taxable at slab rates. Bonds are redeemable at par after lock-in.
| Rule | Detail |
|---|---|
| Maximum exemption | ₹50,00,000 |
| Investment deadline | Within 6 months of sale date |
| Lock-in period | 5 years |
| What to invest | Capital gains amount only (not sale proceeds) |
| Who can invest | Resident individuals and HUFs |
| Asset sold | Any LTCG asset (not just real estate) |
6-MONTH DEADLINE IS STRICT
If you miss the 6-month window, you lose the exemption entirely. There is no extension. Mark this date in your calendar immediately after selling.
There are multiple reinvestment exemption sections. Here's how they differ:
| Section | Asset Sold | Reinvest In | Limit | Lock-in |
|---|---|---|---|---|
| 54 | Residential house | Residential house | Full CG | 3 years |
| 54EC | Any LTCG asset | REC/PFC/IRFC/HUDCO bonds | ₹50L | 5 years |
| 54F | Any non-house LTCG asset | Residential house | Full CG | 3 years |
WHEN 54EC WINS
54EC is only for LTCG from land or building. It does not cover equity, gold, or other assets. Within that, it is simpler than buying another house — but the ₹50L cap is a hard limit.
Sections 54-54GB reinvestment exemptions are available in both regimes. They are capital-gains exemptions, not Chapter VI-A deductions, so the new regime (section 115BAC) does not disallow them.
You can use 54EC regardless of regime. The choice between regimes affects your slab rate on any un-exempted gains, not the availability of the exemption itself — run both in a calculator if you are unsure.