CBDT notifies that interest paid by BRICS New Development Bank on Maharajah INR bonds is exempt from TDS for tax year 2026–27.
No TDS on NDB’s Maharajah Bond Interest
The Central Board of Direct Taxes (CBDT) has issued a notification exempting interest payments by the BRICS New Development Bank (NDB) on Maharajah INR bonds from Tax Deducted at Source (TDS) for the tax year 2026–27. The exemption applies to both resident and Foreign Institutional Investor holders.
The move aligns with tax treaties and bilateral agreements under which the NDB is granted sovereign immunity and tax concessions. The notification clarifies that such interest is excluded from the charge of TDS under Chapter XVII of the Income Tax Act, reinforcing India’s commitment to multilateral financial institutions.
Financial institutions and investors holding these bonds need not deduct TDS on interest disbursements. This is a time-bound relief specifically for the 2026–27 assessment cycle, and future applicability may depend on policy continuation.
