The Central Government of India has officially declared the bond issued by the NABARD as a Zero Coupon Bond for purposes of Income Tax.
Saloni Kumari | Jun 13, 2025 |
CBDT Notifies Zero-Coupon Bonds of NABARD for Income Tax
The Ministry of Finance has issued an official notification dated June 12, 2025, notifying the Central Government of India has officially declared the bond issued by the NABARD (National Bank for Agriculture and Rural Development) as Zero Coupon Bond for purposes of Income Tax, in exercise of its powers described under clause (48) of section 2 of the Income-tax Act, 1961 (43 of 1961), read with clause (ii), clause (iii) and clause (v) of sub-rule (3) and sub-rule (6) of rule 8B of the Income-tax Rules, 1962.
A Zero Coupon Bond is also known as a discount bond that does not pay interest over time. Instead, you buy it at a much lower price than its final value (called face value), and you get the full value when the bond “matures” (ends). The difference between the purchase price and the amount received at maturity is considered the gain (income).
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