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Fixed Deposits & Bonds

Invest in FDs and Bonds for a Fixed Rate of Interest

What is a corporate deposit?

Corporate Deposits are loan provisions where a particular amount of funds is placed on deposit under account holder’s name. The money placed on deposit gets a fixed rate of interest, as per the terms and conditions that administers the account. The actual amount of the fixed rate can be swayed by factors as the type of currency involved in the deposit, the period set in place for the deposit, and the place where the deposit is made.

Profits of investing in Company Fixed Deposits:

  • High-interest Rates
  • Short-term deposits
  • Only 6 months of Lock-in period
  • No Income Tax taken at source if the interest income is up to Rs.5,000 in a financial year

54 EC Bonds

Capital Gain be saved Under Section 54 EC or Section 54F, if the land sold is non-agricultural. We provide such bonds which qualify for Sec 54EC Bonds.

  • Tax can be saved under Section 54 EC by investing in bonds
  • Tax can be saved under Section 54 F by investment in New residential house

To claim Section 54 EC, following conditions needed to be satisfied:

  • Long Term Capital Asset held by an assessee for more than 3 Years.
  • If an assessee has traded the long-term capital asset during the preceding year and made a long-term capital gain, then he can invest that money in Capital gain bonds and can save tax on long term capital gain.
  • Assessee here means all type of assessees like; individual, firm, company, etc.
  • Amount to be put in bonds is only capital gain, not the net consideration received on sale of the long-term capital asset.
  • Amount freed under this section will be amount of capital gain or amount invested in capital gain bond, whichever of the two is lower (maximum up to 50 Lakh).
  • Maturity Period of these bonds is 3 years.
  • Capital gain bonds, entitled under this section, now can be issued only by the REC or NABARD
  • Bonds cannot be guaranteed, sold, transferred before completion of 3 years from the date of purchase and in case it is transferred, then amount of capital gain exempted on investment in these bonds will be taxable in that previous year as long-term capital gain.
  • Sum of capital gain should be put in Capital gain bond within 6 Months from date of transfer/sale of capital asset.

Notably, 50 lakh is the limit for each financial year. As your 6 month limit falls in two different Financial years, therefore one can save 50 lakh in the Financial Year 2008-09 and 50 lakh in 2009-10. To sum up, one can save up to a maximum of 1 Crore of capital gain u/s 54EC.

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