In the Union Budget 2018, the finance minister proposed to increase the lock-in period of investments in capital gain tax exemption bonds (under section 54EC of the Income Tax Act, 1961) to 5 years. In the Union Budget 2017, the government had said it would introduce more financial instruments to save tax on capital gains. However, instead of new products, the present lock-in period of 3 years for 54EC bonds has been proposed to increase to 5 years. Given that the lock-in period or tenure of an investment plays an important role in deciding whether it makes sense to invest in or not, let’s look at whether a longer lock-in period could deter investors from investing in these bonds to save taxes. Also, if one does not invest in them, what are the other options for planning your capital gains?
75 years to reach per capita income of $2730, will take only 5 years to add another $2000, FM Sitharaman
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