The Government of India has officially authorized the Housing and Urban Development Corporation Limited (HUDCO) to issue bonds that qualify for capital gains tax exemption under Section 54EC of the Income Tax Act, 1961.

✅ Key Highlights:
Effective Date:
HUDCO bonds issued on or after April 1, 2025, are now considered “long-term specified assets” under Section 54EC.

Capital Gains Exemption:
Investors can reinvest capital gains (from sale of land or building) into HUDCO bonds within 6 months of the transfer to claim exemption from tax on those gains.

Eligible Investment Limit:
Up to ₹50 lakh in a financial year can be invested in these bonds for claiming the exemption.

Lock-in Period:
The bonds are redeemable after 5 years, and the investment must be held for the full lock-in period to retain the tax benefit.

Current List of 54EC Eligible Bonds:

1. National Highways Authority of India (NHAI)
2. Rural Electrification Corporation (REC)
3. Power Finance Corporation Limited (PFC)
4. Indian Railway Finance Corporation (IRFC)
5. HUDCO – effective from April 1, 2025
6. Any other bond notified by the Central Government