Section 54EC → Section 85

Exemption on LTCG from land or building invested in specified bonds (NHAI, REC, etc.)

Section 54EC of the old Income-tax Act, 1961 · new section 85 under the Income-tax Act, 2025

New reference Section 85

Income-tax Act, 1961Section 54EC

LTCG from land or building invested within 6 months
Maximum ₹50 lakh across the year of transfer and the next year
5-year lock-in; loan against bonds treated as transfer

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 85

Same exemption, now section 85
6-month window, ₹50 lakh cap, 5-year lock-in retained
Bonds: NHAI, REC or other notified bonds issued after 1 April 2018
No deduction under section 123 for the same investment

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; conditions unchanged.

Practice notes

Only land or building qualifies as the original asset since FY 2018-19.
Combine with section 82 (old 54) where part is invested in a house.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is 54EC called in the new Income Tax Act 2025?

Section 85: invest LTCG from land or building in specified bonds within 6 months, up to ₹50 lakh, with a 5-year lock-in.

What is section 54EC called in the new Income-tax Act, 2025?

Section 54EC of the Income-tax Act, 1961 corresponds to Section 85 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 54EC under the new Income Tax Act?

Renumbered; conditions unchanged.

Is section 54EC still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 54EC of the 1961 Act. Section 85 of the 2025 Act applies from tax year 2026-27.

Related sections

54→82Exemption on long-term capital gain from sale of a residential house reinvested in another residential house 54F→86Exemption on long-term capital gain from any asset other than a residential house, when net consideration is invested in a residential house 112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)