With reference to Maharajah Bonds and the CBDT announcement, consider the following statements: 1. The bonds are intended to fund non-sustainable infrastructure projects in India. 2. TDS is applicable on interest for foreign institutional investors from FY 2026-27. 3. The NDB seeks to raise ₹25,000 crore through these bonds over a period of five years. Which of the statements given above is/are correct?

CBDT announces no tax deduction at source on interest for Maharajah Bond holders

GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims· 20 October 2026

Infrastructure financing and fiscal policy: a GS3 case study on attracting foreign investment.

Why in news

The CBDT announced that no tax deduction at source (TDS) will be applicable on interest for Maharajah Bond holders for FY 2026-27 and beyond.

Background

The CBDT's decision covers both resident and foreign institutional investors. The NDB is seeking permission to raise ₹25,000 crore through these bonds over five years to fund sustainable infrastructure projects in India.

Facts for Prelims

BodyCBDT: Central Board of Direct Taxes
FactNDB seeks to raise ₹25,000 crore through Maharajah Bonds
FactBond tenure for infrastructure funding is over five years
FactTDS exemption applies to both resident and foreign institutional investors

Prelims practice question

With reference to Maharajah Bonds and the CBDT announcement, consider the following statements:

The bonds are intended to fund non-sustainable infrastructure projects in India.
TDS is applicable on interest for foreign institutional investors from FY 2026-27.
The NDB seeks to raise ₹25,000 crore through these bonds over a period of five years.

Which of the statements given above is/are correct?

(a)3 only
(b)1 and 3 only
(c)2 and 3 only
(d)1, 2 and 3

Show answer

Answer: (a) 3 only — Statement 3 is correct. Statement 1 is incorrect: The bonds are intended to fund sustainable infrastructure projects. Statement 2 is incorrect: The CBDT announced no TDS will be applicable to both resident and foreign institutional investors.

For Mains

Q. Discuss how the issuance of Maharajah Bonds can facilitate India's infrastructure goals while managing fiscal and monetary stability.

Dimensions to cover in your answer

Fiscal leverage: Utilizing sovereign-backed bonds to bridge infrastructure funding gaps
Investor sentiment: Impact of TDS exemptions on attracting foreign institutional capital
Debt sustainability: Balancing long-term infrastructure liabilities with national debt-to-GDP ratios

Keywords: Tax Deduction at Source · Infrastructure Financing · Foreign Institutional Investors · Fiscal Policy · Sustainable Development

Read the full news →Report a mistake in this note How notes are made Source: Economic Times ↗

More Economy notes

Yes Bank assesses legal options as ₹8,415 crore AT1 bonds move to liabilities · 20 October 2026
KSEB to liquidate ₹5,000 crore in assets via new regulatory asset surcharge · 19 October 2026
RBI repo rate hike to 5.50% could raise EMI by Rs 769 · 19 October 2026
Rural female labour force participation rose from 33% to 45.9% since 2019–20 · 19 October 2026
Tamil Nadu youth unemployment fell from 26% to 14% by 2025 · 19 October 2026
Keralam’s first export consignment under India-New Zealand FTA flagged off from Cochin Port · 18 October 2026

All Economy current affairs →

Something wrong, or something missing?

Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.

Report a mistake →Ask for something →[email protected]

This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.