09 July 2025

The Central Government has officially designated certain bonds issued by the Indian Renewable Energy Development Agency (IREDA) as "long-term specified assets" under Section 54EC of the Income-tax Act, 1961. This notification applies to bonds that are redeemable after five years and are issued from the date of this notification onwards.

This classification allows investors to potentially claim capital gains tax exemption by investing in these specific IREDA bonds.

A key condition for IREDA is that the proceeds generated from these bonds must be exclusively used for renewable energy projects that are capable of servicing their debt using their own project revenues, without relying on financial support from State Governments for debt repayment.