CBDT notifies NABARD Bonds as Zero Coupon Bonds Worth ₹19,500 Crore u/s 2(48) of Income Tax Act [Read Notification]

The notification was issued under the powers conferred by clause (48) of section 2 of the Income-tax Act, read with sub-rule (3) and (6) of Rule 8B of the Income-tax Rules, 1962. This classification allows for specific income tax treatment, ensuring the bonds are taxed only at the time of redemption rather than annually.

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Key Features of the Notified Bonds:

• Bond Name: Zero Coupon Bond of the National Bank for Agriculture and Rural Development (NABARD)
• Tenure: 10 years, 11 months, and 13 days
• Issue Deadline: On or before 31st March 2027
• Redemption Value: Rs. 19,500 crore
• Discount (Implied Issue Price): Rs. 10,349.625 crore
• Number of Bonds: 19.50 lakh

These bonds will be issued at a deep discount and do not carry periodic interest payments. Instead, the returns to investors accrue solely through the appreciation of the bond value, redeemed at maturity.

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This move is part of the government’s strategy to support NABARD’s efforts in funding rural infrastructure, agricultural development, and credit delivery mechanisms. NABARD plays a vital role in uplifting the rural economy, and cost-effective borrowing instruments like zero-coupon bonds help the institution raise capital without immediate outflow obligations.

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