Capital Gain Scheme Bonds, commonly known as Capital Gains Tax Exemption Bonds, are investment instruments that help taxpayers save capital gains tax under Section 54EC of the Income Tax Act in India. These bonds are typically issued by government-backed institutions such as National Highways Authority of India and Rural Electrification Corporation. Investors must invest the capital gains amount within six months of selling a long-term asset to claim tax exemption. These bonds have a lock-in period of five years and offer fixed interest rates. They are considered safe investments because they are backed by government entities, making them suitable for conservative investors seeking tax benefits.
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