New Delhi, July 10 || The Central Board of Direct Taxes (CBDT) has notified bonds issued by Indian Renewable Energy Development Agency Ltd. (IREDA) as "long-term specified assets" that are eligible for tax exemption benefits under section 54EC of the Income-tax Act.
The tax benefit has kicked in with effect from July 9, 2025.
The CBDT notification states that 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.
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, according to the official statement.
"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 benefit in terms of lower cost of funds, which is a significant development to support the expeditious development of the renewable energy sector.