Ministry of Finance, through the Central Board of Direct Taxes (CBDT), has issued Notification No. 34/2025 dated 17th April 2025, specifying the “Ten Year Zero Coupon Bond” of Housing and Urban Development Corporation Ltd. (HUDCO) as a zero coupon bond under clause (48) of Section 2 of the Income-tax Act, 1961. This designation is in accordance with relevant provisions of Rule 8B of the Income-tax Rules, 1962.
The bond has a tenure of ten years and one month and must be issued on or before 31st March 2027. It will have a maturity value of ₹5,000 crores, issued at a discount of ₹2,351.49 crores, and a total of five lakh bonds are to be floated. The proceeds from the bond are to be exclusively used by HUDCO for infrastructure projects that are capable of servicing the debt from project-generated revenues, without requiring financial support from State Governments.
The notification also clarifies that ‘infrastructure’ will include all sub-sectors listed in the Updated Harmonised Master List of Infrastructure Sub-sectors as per Notification No. 262 of the Department of Economic Affairs dated 11th October 2022, including any future updates. The term ‘infrastructure project’ refers to any project within this defined sector. This classification enables HUDCO to access specific tax benefits associated with zero coupon bonds for infrastructure development.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 34/2025 Income Tax | Dated: 17th April, 2025
S.O. 1774(E).— In exercise of the powers conferred by clause (48) of section 2 of the Income-tax Act, 1961 (43 of 1961), read with clause (ii), clause (iii) and clause (v) of sub-rule (3) and sub-rule (6) of rule 8B of the Income-tax Rules, 1962, the Central Government hereby specifies the bond with the following particulars as zero coupon bond for the purposes of the said clause (48) of section 2 of the said Act, namely :-
(a) name of the bond – Ten Year Zero Coupon Bond of Housing and Urban Development Corporation Ltd.
(b) period of life of the bond – Ten years one month
(c) the time schedule of the issue – To be issued on or before the 31st day of of the bond March 2027
(d) the amount to be paid on maturity – Rs. 5,000 crores
or redemption of the bond
(e) the discount – Rs. 2,351.49 crores
(f) the number of bonds to be issued – Five lakhs
2. Housing and Urban Development Corporation Ltd. shall utilise the proceeds from such bonds only for those infrastructure projects which can service the debt out of the project revenues without being dependent on the State Governments for the service of debts.
Explanation: For the purpose of this notification,
(a) ‘Infrastructure’ includes all infrastructure sub-sectors as defined vide notification no. 262 of the Department of Economic Affairs, Ministry of Finance issued by F.No.13/1/2017-INF dated October 11, 2022 (Updated Harmonised Master List of Infrastructure sub-sectors) and shall include any amendments or additions made thereof;
(b) ‘Infrastructure project’ means any project in Infrastructure sector.
[Notification No. 34 /2025/F. No. 300164/2/2024-ITA-I]
ASHWANI KUMAR, Under Secy.
