CBDT CIRCULAR NO.2/2018 [F.NO.370142/15/2017-TPL], DATED 15-2-2018
31. Expanding the scope of long term bonds under 54EC.
31.1 Section 54EC of the Income-tax Act provides that capital gain to the extent of Rs. 50 lakhs arising from the transfer of a long term capital asset shall be exempt if the assessee invests the whole or any part of capital gains in certain specified bonds, within the specified time. Before amendment by the Act, investment in bonds issued by the National Highways Authority of India or by the Rural Electrification Corporation Limited were eligible for exemption under this section.
31.2 In order to widen the scope of the section for sectors which may raise fund by issue of bonds eligible for exemption under section 54EC of the Income-tax Act, the said section has been amended so as to provide that investment in any bond redeemable after three years which has been notified by the Central Government in this behalf shall also be eligible for exemption.
31.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years.