Tax – Paid Green Bond Issuance

The Government of India issues green bonds to develop the clean energy sector in the country. The bonds act as security for a loan. Usually, the bonds are tax-free. Taxes are exempted to increase the number of green projects in the country. The Power Ministry recently proposed the tax – paid bonds.

Should I pay tax on bonds?

The investor raising his capital through bonds should file ITR – 2. It means Income Tax Return. ITR-w includes taxes on income that comes from sources other than profession or business. Usually, green bonds are exempted from taxes. This is done to increase projects and businesses in green energy.

What is Power Ministry proposing?

The ministry wants to tax green bonds. Also, it wants Power Finance Corporation to act as the nodal agency of climate financing.  PFC is a public sector unit and is the backbone of the power sector.


The Government of India is looking for ways to increase investments in renewable energy. The country is striving hard to achieve its objective of reaching 500 GW of non–fossil fuel by 2030. Also, India believes that increasing the use of clean energy will help the country achieve its goal of becoming a zero-carbon-emitting country by 2070.




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