New Delhi: The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, has notified the Housing and Urban Development Corporation Limited (HUDCO) as an eligible entity to issue Capital Gain Tax Exemption Bonds under Section 54EC of the Income Tax Act, 1961. The notification will come into effect from April 1, 2025, marking a significant development in the PSU’s financial offerings.
With this move, HUDCO has joined a select group of Public Sector Undertakings (PSUs) authorized to offer this unique tax-saving investment instrument to investors. Under the provisions of Section 54EC, capital gains arising from the transfer of long-term capital assets such as land or buildings can be exempt from taxation if the gains, subject to a cap of ₹50 lakh per investor, are invested in specified bonds within six months of the transfer date.
These Capital Gain Tax Exemption Bonds, once issued by HUDCO, will have a maturity period of five years. They are designed to attract long-term investors seeking to save on capital gains tax while contributing to infrastructure development.
HUDCO’s inclusion in this list is being seen as a strategic step aligned with the Government of India’s vision for Viksit Bharat @2047, which aims at long-term and sustainable infrastructure growth. The issuance of these bonds is expected to broaden HUDCO’s investor base, particularly among retail investors, and provide the company access to long-tenure funds at competitive rates.
The funds raised through these bonds will support HUDCO’s mandate of financing infrastructure beyond housing, reinforcing its role as a key enabler of development projects across the country.
This development not only enhances HUDCO’s financial resource portfolio but also strengthens the government's broader agenda of promoting infrastructure-led economic growth.
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