IREDA Bonds Get Tax Exemption

New Delhi, Jul 10 (PTI) State-owned IREDA on Thursday said bonds issued by the company will be exempt from tax, a development that is expected to attract more investments for renewable energy projects.

In a filing, the company said "Central Board of Direct Taxes (CBDT) under the Ministry of Finance has notified bonds issued by IREDA as 'long-term specified asset' under section 54EC of the Income-tax Act, 1961."

As per the notification effective July 9, bonds redeemable after five years and issued by IREDA on or after the notification date will qualify for tax exemption benefits under section 54EC of the Income Tax Act, 1961, which allows capital gains tax exemption on investments in specified bonds.

This move is expected to attract wider participation from investors seeking tax-saving instruments and strengthen the renewable energy financing ecosystem in the country.


Eligible investors can save tax on Long Term Capital Gain (LTCG) up to Rs 50 lakh by investing in these bonds in a financial year.

IREDA will get benefit in terms of lower cost of funds, which is a significant development for the renewable energy sector.

The proceeds from these bonds will be utilised exclusively for renewable energy projects capable of servicing debt through their project revenues, without dependence on state governments for debt servicing.

IREDA CMD Pradip Kumar Das said, "The recognition by the government reinforces IREDA's pivotal role in accelerating renewable energy financing in the country. The tax-exempt status for our bonds will offer an attractive investment avenue while ensuring increased capital availability for green energy projects, contributing to India's 500 GW non-fossil fuel capacity target by 2030."

IREDA is a non-banking financial institution under the Ministry of New and Renewable Energy.