CBDT Notifies REC Ltd.'s Rs 5,000 Crore Zero Coupon Bond u/s 2(48) of IT Act

The CBDT has notified REC Limited's Rs 5,000 crore zero-coupon bond under Section 2(48) of the Income Tax Act. This notification provides specific tax treatment for these bonds, ensuring clarity for investors and REC Limited. Zero-coupon bonds are debt instruments that do not pay periodic interest but are issued at a discount and redeemed at face value, with the difference being the investor's return. This move by the CBDT helps in streamlining the tax implications for such financial instruments, promoting investment and facilitating REC Limited's capital raising activities. It ensures that the tax framework aligns with the characteristics of zero-coupon bonds.