Are 54 EC Bonds really worth Investing for Tax Exemption

Are 54 EC Bonds actually worth Investing to save Tax? 🤔💰

54 EC Bonds are Tax saving Bonds issued by PFC, REC, IRFC, that help you save the Tax on the gains made by selling Land or Building, or both. 🏠💼

The maximum deduction limit is Rs. 50 Lakhs or the amount invested in the 54 EC Bonds, whichever is lower. 💲

Refer to the Example on slide 4 to understand the Exemption. 📈

However, these bonds provide a Tax Exemption but offer only 5% Returns and have a 5-Year Lock-in Period. ⏳

On the other hand, Stock markets are Highly Risky and Volatile but can deliver higher returns in the long term. 📊📉

You may think that Investing in 54 EC Bonds and saving tax will lead to higher capital at maturity, but this may not be true. 🔍💡

To calculate the difference in the amount at maturity, I’ve created a simple Excel calculator. 📊🧮

Just input values like:
1) Purchase Price of Land/Building
2) Net Sales Consideration
3) % amount to Invest in Equity
4) Expected Returns (default set @12% for Equity and 7.5% for Debt, may change if you have any other expectations)

You’ll get the exact amount at maturity for both cases:
1) Investing LTCG in 54 EC Bonds and the rest in Equity/Debt
2) Investing the entire amount in Equity/Debt after paying Taxes. 💼💰

Remember, Stock Markets are risky, and you’ll pay Taxes on Debt Gains based on your Tax Slab. It might still be a better choice if you don’t want to lock your capital for 5 Years. 📊🔒

Don’t make financial decisions solely based on this calculator. Understand your Risk appetite and Holding capacity. 🤝📈

I have attached the Carousel post and also the Excel Calculator, check it out and let me know your views on it. 😊📧

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