CBDT Exempts Interest on Maharajah INR Bonds from TDS for FY 2026-27 Onwards

Last updated: 27 October 2026

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The Central Board of Direct Taxes (CBDT) has announced that interest earned on Maharajah INR Bonds, issued by the New Development Bank from the tax year 2026-27 onwards, will be exempt from Tax Deducted at Source (TDS). This exemption applies to both resident bondholders and Foreign Institutional Investors. The New Development Bank is required to provide specific information as per the Income-tax Rules.

MINISTRY OF FINANCE(Department of Revenue)(CENTRAL BOARD OF DIRECT TAXES)NOTIFICATIONNew Delhi, the 19th October, 2026INCOME-TAX S.O. 5694(E). In exercise of the powers conferred by sub-section (1) of section 400 of the Income-tax Act, 2025 (30 of 2025) (hereinafter referred to as the said Act), the Central Government hereby specifies that no deduction of tax shall be made under section 393(1) [Table: Sl.No. 5] or section 393(2) [Table: Sl.No. 17] of the said Act, as the case may be, on payment

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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FAQ :

The main change is that interest paid on Maharajah INR Bonds issued by the New Development Bank from the tax year 2026-27 onwards is now exempt from TDS.

The exemption applies to holders of Maharajah INR Bonds who are either residents or Foreign Institutional Investors, as defined in the Income-tax Act.

This notification comes into effect from the date of its publication in the Official Gazette.

The New Development Bank must furnish information as required under Schedule VII of the Income-tax Act and the Income-tax Rules, 2026.

Notification No : 136/2026 IT
Source : https://www.incometaxindia.gov.in/documents/d/guest/notification-no-136-2026-1-pdf

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