CBDT Notifies IREDA Bonds As 54EC-Eligible Assets, Offering LTCG Tax Exemption From July 9

New Delhi: 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.

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"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.

Welcoming the notification, IREDA Chairman & Managing Director Pradip Kumar Das said, "We are deeply grateful to the Ministry of Finance, Ministry of New and Renewable Energy and Central Board of Direct Taxes for this valuable policy initiative. This 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."

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

IREDA announced a robust 49 per cent jump in net profit to Rs 502 crore for the Jan-March quarter of the financial year 2024-25 compared to the corresponding figure of Rs 337 crore in the same quarter of the previous fiscal year.

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The country's largest pure-play green financing NBFC has recorded a revenue of Rs 1,392 crore during the fourth quarter, which represents a 37.7 per cent increase from Rs 1,916 crore in the Q4 of FY 2023-24.

The government-owned NBFC's loan sanctions for the fourth quarter recorded a 27 per cent rise to Rs 47,453 crore, while loan disbursements for the quarter rose 20 per cent to Rs 30,168 crore.

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