Capital gains tax exemptions on NABARD, housing bank bonds withdrawn

New Delhi, Mar 30 (UNI) Tax exemptions from the long-term capital gains invested, on or after April one, 2006 will not be available, in regard to the bonds of the National Bank for Agriculture and Rural Development (NABARD), National Housing Bank and Small Industries Development Bank of India.

The exemption, would now be available only on the long-term capital gains invested, on or after April one this year, in the bonds of the Rural Electrification Corporation Ltd and the National Highways Authority of India, the government clarified today.

Under the provisions of section 54 EC of the Income-tax Act, long-term capital gains were exempt from tax if such gains were invested in the bonds issued by the National Bank for Agriculture and Rural Development, Rural Electrification Corporation Ltd, National Housing Bank, Small Industries Development Bank of India, or National Highways Authority of India.

The Finance Bill, 2006 has proposed to amend the provisions of this section so as to restrict such investment to the two entities in rural electrification and highway construction. However, these bonds have to be notified by the Central Government.

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