CBDT Notifies REC Ltd.'s ₹5,000 Crore Zero Coupon Bonds as Tax-Exempt Under Income Tax Act
CBDT Notifies REC Ltd.’s ₹5,000 Crore Zero Coupon Bonds as Tax-Exempt Under Income Tax Act
The Central Board of Direct Tax (CBDT) has notified the issuance of Ten-Year Zero Coupon Bonds by REC Limited as tax-exempt under clause (48) of Section 2 of the Income Tax Act, 1961.
The zero coupon bonds will be classified as specified securities under the Income-tax Rules, 1962, making them eligible for certain tax benefits.
The Central Government has notified the issuance of the Ten-Year Zero Coupon Bond of REC Ltd., which will have a tenure of 10 years and 6 months. The bonds, totaling a maturity value of ₹5,000 crore, will be issued at a discounted value of ₹2,200 crore, offering substantial yield to investors. A total of five lakh units of these bonds are planned to be issued, and the issuance will be completed on or before March 31, 2027.
These bonds are structured to offer long-term funding to REC Ltd. without periodic interest payouts, making them suitable for investors looking for lump-sum returns upon maturity. The difference between the issue price and maturity value represents the earnings for the investor, which are generally taxed favorably under the specified classification.
Notification Details
Notification No. 52/2025
Date: 30th May, 2025
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
