Informist, Wednesday, Jul. 9, 2025

NEW DELHI – The government has allowed Indian Renewable Energy Development Agency Ltd. to raise funds through 54EC bonds, also known as capital gains bonds, the finance ministry Wednesday said in a gazette notification. IREDA is the sixth company that can raise funds through this special instrument, apart from REC Ltd., National Highway Authority of India, Power Finance Corp. Ltd., and Indian Railway Finance Corp. Ltd.

"IREDA shall utilise the proceeds from such bonds only for those renewable projects which can service the debt out of the project revenues without being dependent on the State Governments for the service of debts," the ministry said in the notification.

As per the Income Tax Act, investors making capital gains on the sale of immovable property can invest in 54EC bonds to save on long-term capital gains. Though these bonds offer a lower rate of interest at 5.25%, investors benefit from the tax exemption enjoyed by these instruments. Investors can invest up to INR 5 million in a financial year in these bonds, which have a lock-in period of five years.

IREDA's net profit for the March quarter rose 49% to INR 5.02 billion on account of robust gains in interest income. Shares of the company Wednesday closed 0.3% lower at INR 165.91 on the National Stock Exchange.  End

Reported by Shubham Rana

Edited by Deepshikha Bhardwaj

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