CBDT Exempts Interest on New Development Bank’s Maharajah INR Bonds from TDS:

The Central Board of Direct Taxes (CBDT) under the Ministry of Finance (Department of Revenue), vide Notification No. S.O. 5694(E), dated October 19, 2026, has explicitly clarified that no tax will be deducted under Section 393(1), Table Sl. No. 5, or Section 393(2), Table Sl. No. 17, of the Income-tax Act, 2025, as applicable, on interest payments made to eligible holders of Maharajah INR Bonds issued by the New Development Bank.

The central government, in exercise of its powers granted under sub-section (1) of section 400 of the Income-tax Act, 2025, has exempted interest payments made by the New Development Bank on Maharajah INR Bonds from Tax Deducted at Source (TDS). The exemption will apply during the tax year 2026-27 and subsequent tax years.

The exemption is available to two categories of bondholders: residents and Foreign Institutional Investors (FIIs) covered under Section 210(6) of the Income-tax Act, 2025. These eligible investors can receive interest on the specified bonds without tax being deducted at source, subject to the conditions prescribed in the notification.

However, the New Development Bank must continue to furnish the required information as per Schedule VII, Table Sl. No. 49 of the Income-tax Act, 2025, and the applicable provisions of the Income-tax Rules, 2026.

Refer to the official notification for complete information.