Time limit extended to invest to save capital gains tax (For Indian Economy)

Section 54EC of Income Tax Act, 1961, provides tax exemption on capital gains arising from the transfer of a long-term capital asset, if such capital gains are invested in certain bonds within a period of six months after the date of such transfer. With effect from 1.4.2006, such gains can be invested only in the notified bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India ( NHAI ).
Bonds of REC and NHAI, to be issued during Financial Year 2006-07, have been notified by Central Government on 29.06.2006 for Rupees 4,500 crores and Rupees 1,500 crores respectively.
Due to non-availability of these bonds, some persons could not avail of benefit under section 54EC, and for some other persons the effective time available for making the investment is less than six months. With a view to removing the hardship caused to taxpayers, the Central Board of Direct Taxes (CBDT), has issued an order under section 119(2)(c) of Income Tax Act, 1961 on 30.06.2006 extending the time limitation for making the investments under section 54EC as under: (i) up to 30th September, 2006 in case of persons where the long-term capital asset was transferred between 29.9.2005 and 31.12.2005 (both dates inclusive);(ii) up to 31st December, 2006 in case of persons where the long-term capital asset was transferred between 01.01.2006 and 30.06.2006 (both dates inclusive).