NDB Maharaja Bonds Gain Tax Exemption; Indians to Benefit from Green Financing

The New Development Bank (NDB), a Shanghai-based multilateral development institution, has obtained exemption from tax deduction at source on interest income from its Maharaja Bonds issued in Indian rupees. This tax benefit makes the investment instruments more attractive to individual and institutional investors in India seeking debt instruments with competitive post-tax returns.

Under the exemption, investors will receive interest payments without TDS deductions, allowing them to retain the full interest amount subject to their personal tax filing obligations. The exemption applies to bonds issued under the NDB's rupee borrowing program, which aims to raise Rs 25,000 crore over a five-year period to finance green and sustainable development initiatives within India.

The capital raised through these bonds will support projects spanning renewable energy, climate-resilient infrastructure, and other environmentally sustainable ventures across Indian states and municipalities. By denominating bonds in rupees, the NDB reduces currency risk for domestic investors while directly channeling financing into India's development priorities.

Financial analysts noted that the TDS exemption provision enhances the real yield on these bonds compared to conventional domestic debt instruments, potentially attracting a broader investor base. The initiative underscores the NDB's commitment to mobilizing domestic resources for climate and sustainable development financing in India, one of its key member nations.