NRIs can now invest in Sovereign Green Bonds this new way; Know how the impact on taxation of gains
Sovereign Green Bonds (SGrB) through the International Financial Services Centre (IFSC) was announced by the Reserve Bank of India (RBI) on August 29, 2024. IFSC is located in GIFTY city in Gandhinagar, Gujarat. Non-resident Indians (NRIs) wishing to invest in long-term Indian government bonds can now do so through the IFSC route in SGrB.
Read below to find out if SGrBs are worth investing in for NRIs and what their advantages and disadvantages are, including the tax implications.
What are Sovereign Green Bonds (SGrB)
In the Union Budget for the financial year 2022-23, the government announced the issuance of SGrBs, which aim to use the funds for green infrastructure investments, thereby reducing the Indian economy's carbon intensity. After the launch of SGrBs, the government launched Green Fixed Deposits (FDs), which also had a similar aim: to use the funds for green infrastructure investments.
So, if you are looking for green investing options, you may consider investing in SGrBs or Green Fixed Deposits (FD), if eligible.
Who is eligible for investing in Sovereign Green Bonds through IFSC
The Reserve Bank of India notified the scheme on August 29, 2024, for trading and settlement of Sovereign Green Bonds in IFSC. «Retail and NRI investors can invest in Sovereign Green Bonds (SGrBs). Retail investors can do so through the RBI Retail Direct website or their brokerage firm if available. NRIs can also invest in these bonds as 'specified securities' under the Fully Accessible Route (FAR),» says Vijay Kuppa, CEO,
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