Frequently Asked Questions – PFC’s 54EC Capital Gain

Tax Exemption Bonds

1. Who can apply (Eligibility to invest) in PFC’s Capital Gain Bonds?

Following are eligible for issuance of PFC’s Capital Gain Bonds

i. Individuals
ii. Hindu Undivided Families (HUF)
iii. Partnership firm
iv. Insurance Companies
v. Companies and Body Corporates
vi. Provident Funds, Superannuation Funds and Gratuity Funds
vii. Banks
viii. Mutual Funds
ix. Financial Institutions (FIs)
x. Foreign Portfolio Investors (Subject to existing regulations)
xi. Regional Rural Banks
xii. NRIs/other foreign eligible investor investing out of NRO A/c
on non‐repatriable basis
xiii. Co‐operative Banks
xiv. Limited Liability Partnership

2. How much amount can I invest in PFC’s 54EC Bonds ?

You may invest in PFC’s 54EC Bonds in multiple of Rs 10,000/- each, subject
to the following ceilings :

Minimum : 2 Bonds of Rs 10,000/- each (i.e. Rs 20,000)

Maximum : 500 Bonds of Rs 10,000/- each (i.e. Rs 50 Lakh)

3. What is the Interest Rate on PFC’s 54EC bonds?

Currently, the interest rate being offered on PFC’s Capital Gain Bonds is 5.25%
p.a. payable annually.

4. What is the tenure of PFC’s 54EC Bond?

Currently, PFC’s 54EC Bonds have maturity period of 5 years.

5. Can I transfer or sell PFC’s 54EC Bonds? Are these bonds listed on
the stock exchange?

No. 54EC Bonds are Non‐transferable, Non‐Marketable, Non‐negotiable and

cannot be offered as security for any loan or advance. Due to non-

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transferability, the bonds have not been listed on any stock exchange for
purchase/sale.

However, transmission of the Bonds to the legal heirs in case of death of the
Bondholder/Beneficiary to the Bonds is allowed.

6. Whether I can get PFC’s 54EC Bonds in its DEMAT Account.

Yes, you can opt for PFC’s 54EC Bonds for credit in demat account or have the
physical bond certificate.

7. To enable to understand the risk, please tell what is the credit

rating and security of PFC’s 54EC Bonds?

PFC’s 54EC Bonds are AAA rated by domestic credit rating agency(ies)
(AAA/Stable’ by CRISIL, ‘AAA (Stable)’ by ICRA, & 'AAA/Stable' by CARE) and
are secured by a charge on the total receivables of the Company and/ or
identified movable property by a first/pari pasu charge as may be agreed
between the Company and the debenture trustee, pursuant to the terms of the
Debenture Trust Deed excluding the Receivables on which specific charge has
already been created by the Company.

8. Can the bonds be owned jointly?

Individuals / NRI can apply in joint names and maximum three individuals can
apply through a Joint Application. In case of application with Demat option,
the sequence of joint applicants name must be same as mentioned in the
Demat Account.

9. Can I avail nomination facility on PFC’s 54EC Bonds?

Yes, nomination facility is available on PFC’s 54EC Bonds.

The sole Individual/NRI bondholder [or where the Bonds are held by more than one person,
first bondholder along with other joint Bondholders being individual(s)] may nominate any one
person (being an individual) who shall be entitled to bonds in the event of
death of sole holder or all the joint holders, as the case may be. When the
bonds are held by two or more persons, the nominee shall become entitled to
receive the amount (on maturity) only on the demise of all the bondholders in
succession.

However, in case bonds are in Demat form, demographic and nominee details
will be picked up from DP ID/CLIENT ID and the details of the nominee, if any,
as mentioned in the application form will be invalid.

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10. What are the steps to apply PFC’s 54EC Capital Gain Bonds and in
whose favour should I make payment for investment in PFC’s 54EC
Capital Gain Tax Exemption Bonds ?

(I) Payment by Cheque/Demand Draft

(i) Obtain the Application Form from the arranger (list of arrangers at
https://pfcindia.com/ensite/DocumentRepository/ckfinder/files/
Investors/Bonds/54EC/VII/Arranger_Contact_List.pdf) or
Download the same directly from
https://pfcindia.com/ensite/DocumentRepository/ckfinder/files/
Investors/Bonds/54EC/VII/Application%20Form%2054EC%20B
onds(1).pdf

(ii) Fill the Application Form and attach the self-attested requisite KYC
documents as mentioned in the form.

(iii) Draw a cheque or obtain Demand Draft of requisite amount in

favour of “PFC Capital Gain Bonds”. (Demand Draft charges to be borne by
investor)

(iv) Indicate Cheque/Demand Draft details in the Application Form.

(v) Deposit the duly filled in original Application Form along with
requisite documents and cheque/demand draft in the authorized
bank branches. A list of authorized bank branches is available at
(https://pfcindia.com/ensite/DocumentRepository/ckfinder/files
/Investors/Bonds/54EC/VII/List%20of%20Collection%20Centre
s%20-%20PFC%2054EC%20Bonds%20-%20Series%20VII.pdf )

[It would be appreciated that a scanned copy of the documents may

also be e-mailed at [email protected] as advance copy]

Option II : Payment through RTGS/NEFT/Direct Credit

Under this option, the investor should have the following information and
documents:
a. E-mail ID
b. Mobile Number
c. Self attested ID Proof (in PDF format)
d. Self attested Address Proof (in PDF format)
e. Cancelled Cheque for applications with physical bond certificate (in
PDF Format)

Step 1:

1. Click the “Fill Application Form” button-

https://kosmic.kfintech.com/PFC/offline_applicationform.aspx

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2. After filling up the application form online, Click the “Submit” button at
the bottom of the page.
3. SMS will be sent on the mobile number filled up in the application form
on successful submission of the application.
4. Download the duly filled up application form.
5. Take a print of the application form and sign the application at the
relevant places.
6. Make payment through RTGS / NEFT and get UTR Number. Please
note that transaction number and UTR Number are different.
7. Mention the UTR Number in the application form in the relevant box.
8. Scan the application copy duly signed by all applicant(s) and save it in
PDF format.

Step 2:

9. Click the “Upload Application & KYC documents” button.

10. Enter the application details (Application No, Email ID & Mobile No.) as
submitted while filling up the application form to validate the
application form.
11. Click “Get OTP” button to receive an OTP on your e-mail and mobile
number.
12. Enter the OTP received on mobile / E-mail ID and click “Validate“.
13. On validation, the application information will be displayed on the
screen.

Step 3:

14. Upload the following in PDF format to proceed to payment window

a. Scan of Signed Application Form (in PDF format)
b. Scan of Self Attested ID proof (in PDF format)
c. Scan of Self Attested Address Proof (in PDF format)
d. Scan of Cancelled Cheque (self-attested) for applicants
applying for bonds in physical mode (in PDF format)
15. Upon uploading the above documents, it will enable the “Submit”
button.
16. Click on “Submit” button. A success message will be displayed on
successful submission.

[It would be appreciated that a scanned copy of the documents may also be e-
mailed at [email protected] as advance copy]

Option III : Payment through Net Banking / Debit Card

The applicant may utilize the online system available through PFC’s website
https://kosmic.kfintech.com/PFC/online_applicationform.aspx to apply for
the bonds. An investor can fill up and submit online application form and make
payment through Net Banking / Debit Card using the provided payment
gateway. Steps involved in the process are as follows :

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To fill the application form under this option, an investor should have the
following information and documents:
a. E-mail ID
b. Mobile Number
c. Self-attested ID Proof (in PDF format)
d. Self-attested Address Proof (in PDF format)
e. Cancelled Cheque for applications with physical bond certificate (in
PDF Format)

Step 1:

1. Click the “Fill Application Form online” button.

2. After filling up the application form online, Click the “Submit” button at
the bottom of the page.
3. SMS will be sent on the mobile number filled up in the application form
on successful submission of the application.
4. Download the duly filled up application form.
5. Take a print of the application form and sign the application at the
relevant places.
6. Scan the application copy duly signed by all applicant(s) and save it in
PDF format.

Step 2:

7. Click the “Upload Application/KYC documents and Proceed for Online

Payment ” button.
8. Enter the application details (Application No, Email ID& Mobile No.) as
submitted while filling up the application form to validate the
application form.
9. Click “Get OTP” button to receive an OTP on your e-mail and mobile
number.
10. Enter the OTP received on mobile / E-mail ID and click “Validate“.
11. On validation, the application information will be displayed on the
screen.

Step 3:

12. Upload the following in PDF format to proceed to payment window

a. Scan of Signed Application Form (in PDF format)
b. Scan of Self Attested ID proof (in PDF format)
c. Scan of Self Attested Address Proof (in PDF format)
d. Scan of Cancelled Cheque (self-attested) for applicants applying for
bonds in physical mode (in PDF format)
13. Upon uploading the above documents, the payment gateway will get
enabled.
14. Click on “Proceed to Payment” button to make online payment through
Net Banking / Debit Card.

Step 4:

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15. Make Payment through Net Banking / Debit Card.
16. On successful / failed payment, an acknowledgement will be generated
and sent to the e-mail provided in the application form.

[It would be appreciated that a scanned copy of the documents may also be e-
mailed at [email protected] as advance copy]

11. When will I get delivery of my physical bond certificate / credit of

bonds in Demat account.

The credit of bonds in demat account of the investor / physical bond

certificates is issued within a period of 1 (one) month from the deemed date
of allotment.

Last day of the month in which the subscription money is credited in PFC’s
collection account shall be deemed date of allotment of 54EC Bonds. However,
it may be stated that the interest on the allotted bonds will be payable to the
investor with effect from the date of credit of subscription money in PFC’s said
account. (For example, in case, you have applied for bonds and subscription money has been credited in
PFC’s collection account on say 16th April. In such case, the deemed date of allotment shall be 30 th April.
However, the interest on the allotted bonds shall be payable w.e.f. 16th April only)

In case you do not receive the physical certificate or credit of bonds in your
demat account by the said period (i.e. within one month from deemed date of allotment),
you may contact Registrar to the Issue at the following address :-

Registrar to the Issue :

KFIN TECHNOLOGIES LTD.

(Unit : PFC 54EC Bonds)
Selenium Tower B,
Plot Number 31 & 32,
Financial District, Nanakramguda,
Serilingampally
Hyderabad Rangareddy,
Telengana‐ 500 032

Tel: +91 40 67162222

Fax:+91 40 2343 1551

Email : [email protected]
Website : www.kfintech.com

A copy of your communication may also be endorsed to the PFC at the

following address : -

Issuer / Company :

POWER FINANCE CORPORATION LTD

(54EC Unit)
Urjanidhi, 1, Barakhamba Lane,
Connaught Place,
New Delhi – 110001.
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 Tel: +91 11 23456000

E‐mails : For Allotment related matters : [email protected]

For Servicing related matters : [email protected]

12. Would you please give me an example of various event dates like
allotment date, date of delivery of bonds certificate / credit in demat
account, interest payment dates and maturity date for PFC’s 54EC Bonds?

A broad example of various event dates in normal course in respect of PFC’s

54EC Bonds is as follows:-

Event Date
Date of credit of Subscription Money in (assumed date) 18.06.2021
PFC’s Collection Account
Deemed Date of Allotment Last date of credit of 30.06.2021
subscription money in
PFC’s Collection Account
Likely Date of Delivery of Physical Bond Maximum by End of Latest by
Certificate / Credit of Bonds in demat subsequent month of 31.07.2021
account deemed date of allotment
First Due Date of Interest Payment (for 31st July (falling after 31.07.2021
period from 18.06.2021 to 30.07.2021) deemed date of
allotment)

Interest Payment / Maturity Date(s) :

Next Due Date of Interest Payment (for 31st July of Next Year 31.07.2022
period from 31.07.2021 to 30.07.2022)
Next Due Date of Interest Payment (for 31st July of Next Year 31.07.2023
period from 31.07.2022 to 30.07.2023)
Next Date of Interest Payment (for period 31st July of Next Year 31.07.2024
from 31.07.2023 to 30.07.2024)
Next Due Date of Interest Payment (for 31st July of Next Year 31.07.2025
period from 31.07.2024 to 30.07.2025)
Next Due Date of Interest Payment (for End of 5th year from the
period from 31.07.2025 to 29.06.2026) deemed date of allotment 30.06.2026
Due Date of Maturity/Redemption of Bonds
Note : In case due date of interest/maturity falls on a holiday, the same shall be suitably changed as
explained in the Information Memorandum available on website of PFC and Registrar to the Issue.

13. When will I get the interest on PFC’s 54EC Bonds ?

Interest on allotted bonds will be paid every year on 31st July (falling after deemed
date of allotment) till redemption of the said bonds and balance along with
redemption/maturity amount of 54EC Bonds. Redemption/Maturity date
would be 5 years (presently) from the deemed date of allotment of 54EC Bonds.

14. How is the interest earned on these bonds taxed for me?

There is no deduction of tax at source on the interest payable to the Resident

Indian investors on PFC’s 54EC Bonds. However, such investor may be

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required to pay tax on the interest income as advance tax as per applicable
law.

15. I have PFC’s 54EC Capital Gain Bonds in physical mode. Do I need to
surrender the Physical Bond Certificate on its maturity/redemption
after 5 years?

You are not required to surrender the physical Bond Certificate of PFC’s 54EC
Bonds on its redemption/maturity. The bonds will be automatically redeemed
by PFC on maturity (i. e. on the expiry of 5 years from the deemed date of allotment) and the
redemption proceeds would be paid to the registered bondholders.

16. How should I intimate any change in the Bank account details /
address/ nomination detail/etc.?

All the Forms for modification request in the bank account

detail/address/nomination/etc. are available at
https://pfcindia.com/ensite/Home/VS/10246

The link also takes care of requirement for transmission, indemnity form in
case of request for issuance of duplicate bond certificate.

*****

Disclaimer :

Various features given in above FAQs in respect of PFC’s 54EC Capital Gain Bonds have been explained
in the Information Memorandum, which are available on websites of PFC as well as Registrar to the Issue.
Investors are advised to read the same alongwith related documents carefully before making any
investment in PFC’s 54EC Capital Gain Bonds. In case of any discrepancy between above FAQs and
Information Memorandum, the paragraph stated in the Information Memorandum will prevail.

*****

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 Frequently Asked Questions –54EC Capital Gain Tax
Exemption Bonds

1. What are long term specified assets specified for benefits u/s 54EC
of the Income Tax Act 1961?

The long term specified assets under section 54EC of the Income Tax Act are
any bonds redeemable after 5* (Five) years issued by notified companies
(presently 4), which also includes Power Finance Corporation Ltd (PFC), a
Government of India Enterprise under the administrative control of Ministry
of Power and is classified as an Infrastructure Finance Company (NBFC-IFC)
by the Reserve Bank of India.

* The period was 3 (three) years for bonds issued by the then eligible companies between 01.04.2007 to
31.03.2018

2. Is there a ceiling on the amount of exemption to be claimed under

section 54EC of the Act?

Yes. There is a ceiling of Rs. 50 lakhs in a financial year on the investment in

54EC Bonds.

3. What is the time limit within which one has to make investment in
54EC Bonds?

One has to invest in the 54EC Bonds within a period of 6 months from the date
of sale of original asset.

4. Is the benefit available against Short Term Capital Gains?

No. This benefit can only be claimed against long term capital gains.

5. Whether 54EC Bonds can be redeemed before the maturity period

of five years?

No. These bonds can not be redeemed before the specified maturity period.

6. Can a person invest more than Rs. 50 lakh in 54EC bonds?

No. There is a limit of Rs 50 lakh for investment in the 54EC Bonds for availing
benefit under Section 54EC of the Act.

*****
Disclaimer :
PFC does not provide tax, investment, legal, or accounting advice. The above material has been prepared
for informational purposes only and is based on our understanding. The above is not intended to
provide, and should not be relied on for tax, investment, legal or accounting etc. advice. PFC does not
assume any responsibility/liability for any rejection of tax benefit, penalty, loss or any other kind of
adverse outcome in any way for actions taken based on the above material. One should consult own tax,
investment, legal and accounting etc. advisors before engaging in any transaction.
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