Green Investment: Ireda Bonds Gain 54ec Tax Break, Now Eligible For Capital Gains Tax Exemption

The Central Board of Direct Taxes (CBDT) nether nan Ministry of Finance has officially designated bonds issued by nan Indian Renewable Energy Development Agency (IREDA) arsenic “long-term specified assets” nether Section 54EC of nan Income-tax Act, 1961. Effective from July 9, 2025, this notification makes IREDA bonds eligible for superior gains taxation exemption, giving investors a caller measurement to prevention taxes while supporting India’s cleanable power ambitions.

“Recognition nether Section 54EC reinforces IREDA’s pivotal domiciled successful accelerating renewable power financing successful nan country,” said Pradip Kumar Das, Chairman and Managing Director of IREDA. “The tax-exempt position for our bonds offers an charismatic finance avenue while ensuring accrued superior readiness for greenish power projects, contributing to India’s 500 GW non-fossil substance capacity target by 2030.”

IREDA bonds are indebtedness instruments issued by nan government-owned financial institution nether nan Ministry of New and Renewable Energy. These bonds thief IREDA raise costs for renewable power projects crossed India, making them an appealing prime for investors willing successful sustainable finance.

Under Section 54EC, investors tin put semipermanent superior gains of up to ₹50 lakh successful specified bonds, locking successful costs for 5 years to summation exemption from taxation connected those gains. This move not only provides fiscal benefits but besides channels backstage savings into nan country’s greenish maturation plans.

Proceeds from these bonds will exclusively money renewable power projects tin of servicing their indebtedness independently, without reliance connected authorities government support.

IREDA bonds travel successful various types, including tax-free bonds offering tax-exempt interest, taxable bonds pinch higher yields but taxable income, greenish bonds backing eco-friendly projects, and subordinated bonds carrying higher risks but perchance higher returns. Typically rated highly by agencies specified arsenic CARE and ICRA, these bonds connection fixed returns and beardown authorities backing, enhancing information for blimpish investors.

Investors tin bargain IREDA bonds done online platforms for illustration GoldenPi and IndiaBonds aliases via registered brokers dealing successful indebtedness securities. However, they should measurement risks specified arsenic liking complaint fluctuations, ostentation impacting existent returns, and constricted liquidity if needing to waste earlier maturity.

The taxation break is expected to broaden information among investors seeking safe, tax-efficient options, while importantly strengthening India’s renewable power financing ecosystem. This inaugural underscores nan government’s resoluteness to accelerate sustainable power improvement and execute ambiance goals.

Published on: Jul 10, 2025 6:40 PM IST