Power Finance Corporation Ltd- (PFC)

PFC Capital Gain Tax Exemption Bonds – Series V

About PFCL

Power Finance Corporation Ltd was established in 1986 and is the Non-banking financial corporation of India. PFCL is looked after by the power ministry of the country. In 2010, it was classified as the infrastructure finance company by RBI and also is honored with the title ‘Navratna CPSE’.

Power Finance Corporation Ltd is located in New Delhi and their regional branch offices are operated from Mumbai and Chennai respectively. Any country’s development is measured by its energy consumption and PFC has become the global player in India’s development.

Rating :- “AAA/Stable’ by CRISIL, “ AAA ( Stable)” by ICRA & “AAA/ Stable” by CARE

Why should you invest in a PFCL bond?

  • Only financial institutions in the energy sector.
  • Most powerful corporation with market share up to 20%
  • Certified ISO 9001:2015.
  • Steady Profit report and regular dividend pay-out to the stakeholders.
  • Moderate industrial administrative cost.
  • Appointed as a ‘Nodal Agency’ for augmentation of Integrated Power Development Scheme (IPDS), Ultra Mega Power Projects (UMPPs) and is also a ‘Bid Process Coordinator’ for Independent Transmission Projects (ITPs).
  • The PFC bonds are secured, safe, and AAA-rated,
  • PFC bond can be maintained in physical as well as demat form. The investor doesn't need to have a Demat account.
  • To exit from the PFC bonds before the maturity is not allowed.

Things to remember while investing in Power Finance Corporation limited bonds:

Before investing in power finance bonds it is important to remember few important things about the investment process and the PFC:

  • The face value of the power finance corporation capital gain bonds is ₹10,000.
  • The coupon rate on the bond is 5.00%
  • Power finance corporation bonds interest is paid on 31st July Annually till the redemption date.
  • There’s no TDS but the interest earned on the bond is taxed.
  • Investor can make the maximum investment up to ₹50Lakh and the maximum bonds investment allowed are 500.
  • Maturity period of the PFC bonds is 5 years.
  • According to section 54EC of I.T., any person (individuals, HUFs, partnership firms, companies etc.) can avail exemption in respect of long-term capital gains (arising from the sale of a long-term capital asset other than equity shares and securities), if the capital gain is invested in Capital Gain bonds. The exemption will be the amount of capital gain or the amount of investment made, whichever is less.
  • The investment is made within a period of 6 months from the date of transfer of the asset.
  • If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax.
  • Those who wish to save taxes on LTCG can invest the amount in the capital gains bonds within six months from the date of arising profit. By investing in 54 EC Capital gain bond one can save up to Rs 50 Lakh in a single financial year. These instruments are not only capital protected instruments, but they also provide a steady stream of income to you @5%.

TAX Exemption under Section 54 EC

  • Section 54 EC bonds can be used to save tax only when the capital gain is derived from land or building or both.
  • It cannot be used to save tax on capital gain arising from the sale of non-equity mutual funds, debentures, gold jewelry or gold ETFs.
  • The maximum investment in these bonds is Rs. 50 lakh only. As the property prices have soared high, this provision does not provide adequate relief for the investor.

How to Apply for PFC Bonds?

Invest Online in PFCL Bonds
To apply for PFC bonds offline, you will have to

  • Click here to download the form.
  • Fill the application with the required details and documents
  • Along with the PFC bond draw a cheque in the name of- PFC Capital Gain Bonds
  • Courier the form to us at below address along with copy of your PAN card, Cancelled Cheque and Address proof.
    • Mutual Funds Department
    • Asit C. Mehta Investment Interrmediates Ltd.
    • Nucleus House, Saki Vihar Road, Andheri (E), 400072 Mumbai, Maharashtra