Investors Can Claim Up to ₹50 Lakh, ETCFO
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’ under section 54EC of the Income-tax Act, 1961, enabling tax exemption on capital gains. The notification came into effect from July 9, 2025.
As per the notification, any bond issued by IREDA on or after the effective date and redeemable after five years will qualify for long-term capital gains tax exemption under section 54EC. The section provides relief to taxpayers by allowing them to invest capital gains in specified bonds and avail exemption up to ₹50 lakh in a financial year.
The proceeds from these bonds will be used exclusively to finance renewable energy projects that are capable of servicing debt through project revenues without reliance on State Governments.
IREDA will benefit from the recognition through a reduction in the cost of funds, which is expected to support accelerated financing of renewable energy infrastructure.
“We are deeply grateful to the Ministry of Finance, Ministry of New & 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,” said Pradip Kumar Das, Chairman & Managing Director, IREDA.
The move is expected to encourage broader investor participation and support the development of India’s renewable energy financing ecosystem.
