Maharajah INR Bonds: Is Your TDS 0% Now?

The government has exempted interest on Maharajah INR Bonds issued by the New Development Bank from TDS starting FY2026-27. If you hold these bonds, no tax will be deducted at source on your interest payouts — though you still owe income tax based on your slab.

Here's what happened: CBDT has exempted interest income on Maharajah INR Bonds issued by the New Development Bank from TDS deduction, effective from financial year 2026-27 onwards.. The New Development Bank is a multilateral lender co-founded by BRICS nations including India; its rupee-denominated bonds are called Maharajah INR Bonds.. The exemption means bondholders will receive full interest payouts without any upfront tax deduction, though total income remains taxable at their personal income-tax slab rate..

What you should do: Check whether you or your portfolio manager holds any NDB Maharajah INR Bonds — if yes, update your FY2026-27 cash-flow projections to reflect the full pre-TDS interest amount.. Do NOT skip declaring this interest in your ITR — TDS exemption is not a tax waiver; add it under 'income from other sources' and pay tax at your slab rate.. Compare the post-tax yield on these bonds against taxable FDs and RBI Floating Rate Savings Bonds to decide whether the TDS cash-flow advantage improves your actual net return..

When TDS is absent, deploy that interest amount immediately into a liquid fund or sweep FD — even 30 days of float on ₹50,000 interest earns you an extra ₹300–400 at current rates.

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