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Government exempts NDB Maharaja Rupee Bonds from TDS from FY27

The Ministry of Finance exempted interest on NDB's Maharaja INR Bonds from TDS for eligible investors from FY27.

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The Ministry of Finance has exempted interest payments on the New Development Bank's Maharaja INR Bonds from tax deducted at source for eligible resident investors and foreign institutional investors from the 2026-27 tax year. The Central Board of Direct Taxes notified the exemption on October 19, 2026. The relief improves investor cash flow but does not make the interest income tax-free, and resident investors must still report it as taxable income.

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Government exempts NDB Maharaja Rupee Bonds from TDS from FY27

The government has removed tax deducted at source (TDS) on interest payments from the New Development Bank's Maharaja Rupee Bonds from the 2026-27 tax year. The exemption applies to eligible resident investors and foreign institutional investors, allowing them to receive interest without an upfront tax deduction. However, the relief does not make the interest income tax-free; investors must still declare it and pay applicable taxes. The New Development Bank plans to raise Rs 25,000 crore through these rupee-denominated bonds over five years. The funds will be directed toward sustainable development and green projects in India. The move is expected to make the bonds more attractive to investors by improving liquidity and effective returns.

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