Sebi Paves Path for Tax Benefits on Social Sector Bonds

Sebi suggests that the government should allow tax benefits to companies that invest in zero-coupon zero-principal (ZCZP) bonds issued by non-profit organizations listed on the Social Stock Exchange (SSE). This proposal, already sent to the finance ministry, aims to boost social sector spending and facilitate inclusive growth.

To bolster social sector funding, markets regulator Sebi has proposed that the government permit tax benefits for companies investing in zero-coupon zero-principal (ZCZP) bonds issued by non-profit organizations listed on the Social Stock Exchange (SSE).

Sebi's Whole Time Member Kamlesh Chandra Varshney disclosed the move to reporters on Friday, expressing optimism about the finance ministry's approval. 'We have submitted the proposal to the government, advocating that corporate investors in ZCZPs receive Corporate Social Responsibility (CSR) benefits. We are hopeful for swift approval,' Varshney stated during an event hosted by NSE on SSE.

The Central Board of Direct Taxes (CBDT) has also confirmed that investors purchasing these bonds will obtain tax benefits under section 80G of Income Tax rules. These initiatives aim to promote inclusive growth in the social sector, enhance trust, and expand the donor base, Varshney added.