CBDT exempts bond interest from TDS for NDB rupee bonds
In short
CBDT has exempted interest payments on rupee-denominated bonds issued by the New Development Bank from TDS. The rule applies to Maharajah INR Bonds held by Indian residents and foreign institutional investors from the 2026-27 tax year onward.
This matters because investors in these bonds will not face that tax deduction on interest. The report does not say how much more demand the bonds may get.
What the reporting says
CBDT exempted interest payments on rupee-denominated bonds issued by the New Development Bank from TDS, according to the report. The exemption applies to holders of Maharajah INR Bonds who are Indian residents or foreign institutional investors for the 2026-27 tax year and later. The immediate consequence is lower withholding on those bond interest payments, while any effect on demand for the bonds is not stated.
Why it matters
CBDT has exempted interest payments on rupee-denominated New Development Bank bonds from TDS, with the exemption applying to Maharajah INR Bonds held by Indian residents and foreign institutional investors from the 2026-27 tax year onward. This directly changes the tax treatment of those bond payments and may affect after-tax returns. The report does not state any market reaction or issuance details beyond the exemption.