The Central Board of Direct Taxes (CBDT) under the Ministry of Finance has notified bonds issued by the Indian Renewable Energy Development Agency Ltd. (IREDA) as ‘long-term specified assets’ under Section 54EC of the Income-tax Act, 1961.
Key Details
| Parameter | Details |
| Notified Entity | Indian Renewable Energy Development Agency Ltd. (IREDA) |
| Section Involved | Section 54EC of the Income-tax Act, 1961 |
| Benefit | Exemption from Long-Term Capital Gains (LTCG) tax on investment in specified bonds |
| Investment Cap | Maximum LTCG tax exemption up to ₹50 lakh per Financial Year |
| Tenure of Bonds | Redeemable after 5 years |
| Effective Date | For bonds issued on or after July 9, 2025 |
About Section 54EC
- Section 54EC provides capital gains tax exemption if long-term capital gains are invested in notified bonds within 6 months of the transfer of capital asset.
- Notified bonds include those issued by REC, NHAI, PFC, and now IREDA.
Significance of the Move
| Impact Area | Details |
| For Investors | Offers a tax-saving investment instrument with government backing and 5-year maturity. |
| For IREDA | Enables access to low-cost funds to finance renewable energy (RE) projects. |
| For RE Sector | Enhances capital availability for green energy, promoting India’s 500 GW non-fossil fuel capacity target by 2030. |
About IREDA
| Attribute | Details |
| Full Form | Indian Renewable Energy Development Agency Ltd. |
| Parent Ministry | Ministry of New and Renewable Energy (MNRE) |
| Role | Financial Institution for promoting, developing, and extending financial support for renewable energy and energy efficiency/conservation projects in India. |