Major Boost for Green Finance: IREDA Bonds Get Section 54EC Tax-Exempt Status

Major Boost for Green Finance: IREDA Bonds Get Section 54EC Tax-Exempt Status 

In a welcome policy move, the Central Board of Direct Taxes (CBDT) has notified that bonds issued by the Indian Renewable Energy Development Agency Ltd. (IREDA) are now recognized as “long-term specified assets” under Section 54EC of the Income Tax Act, 1961.
📅 Effective from: July 9, 2025

This means investors can now claim Long-Term Capital Gains (LTCG) tax exemption—up to ₹50 lakh per financial year—by investing in IREDA bonds, which are redeemable after 5 years.

Why This Matters:

  • Provides a strong tax-saving incentive for investors.

  • Ensures lower cost of funds for IREDA.

  • Directs capital towards revenue-generating renewable energy projects.

  • Aligns with India’s bold target of 500 GW non-fossil fuel capacity by 2030.

This is not just a fiscal policy update—it’s a clear alignment of financial instruments with sustainability goals.
Such policy recognitions pave the way for wider investor participation and a deeper green financing ecosystem in India.

🔗 Full PIB Press Release:
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2143668

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