Notification No. 89/2026-CBDT [F. No. 164/1/2026-ITA-1] / SO 3936(E)

What it does

Under section 2(112) of the Income-tax Act, 2025, read with sub-rules (5)(b), (5)(c) and (8) of rule 7 of the Income-tax Rules, 2026, the Central Government specifies the Ten Year Zero Coupon Bond of the National Bank for Financing Infrastructure and Development as a zero coupon bond for the purposes of that definition. The particulars notified are a life of ten years, issue on or before 31 March 2028, twenty lakh bonds to be issued, and an amount of twenty thousand crore rupees payable on maturity or redemption; a discount figure is also given, but the scan garbles it and it should be read from the gazette. The specification is subject to the National Bank for Financing Infrastructure and Development fulfilling the conditions laid down in the Income-tax Act, 2025 and the Income-tax Rules, 2026.

Who it reaches

The National Bank for Financing Infrastructure and Development as issuer
Subscribers to and holders of the ten-year bond
Assessing Officers examining the treatment of the discount on such bonds
Advisers computing income on transfer or redemption of the bond

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.2	s.2, s.346, s.355

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 17th July, 2026
(INCOME TAX)
No. 89 of 2026-CBDT
S.O. 3936(E).— In exercise of the powers conferred by section 2(112) of the Income-tax Act, 2025
(30 of 2025) read with rules 7(5)(b), (c) and 7(8) of the Income-tax Rules, 2026, the Central Government hereby
specifies the bond with the following particulars as zero coupon bond for the purposes of section 2(112) of the said Act,
namely :-
(a) Name of the bond Ten Year Zero Coupon Bond of the National Bank for
Financing Infrastructure and Development
(b) Period of life of the bond Ten years
(c) The time schedule for issue of the bond To be issued on or before the 31st day of March, 2028
(d) The amount to be paid on maturity or
redemption of the bond
Twenty thousand crore rupees.
(e) The discount Ten thousand two hundred and nighty six crore twelve lakh
rupees.
(f) The number of bonds to be issued Twenty lakh
2. This notification shall be effective subject to the conditions that the National Bank for Financing Infrastructure
and Development fulfills the conditions as specified in the Income-tax Act, 2025 and Income-tax Rules, 2026.
[No. 89/2026/F. No. 164/1/2026-ITA-1]
HARDEV SINGH, Under Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.

What to watch

The bond must be issued on or before 31 March 2028 to answer the notified particulars.
The specification is conditional on the issuer meeting the conditions in the Income-tax Act, 2025 and the Income-tax Rules, 2026, so it is not unqualified.
The discount amount as printed in the scan is corrupted; verify it against the gazette before using it in any computation.
The notification does not state a separate commencement date.

Where you meet it

In the taxation of the discount on a zero coupon bond and in the computation of gains on its transfer or redemption, and in the issuer's own offer documents.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 75/2026 [F. No. 275/18/2026-IT(B)] / SO 3610(E) : TDS Exemption on Ship Lease Payments to IFSC Units — 4 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 3 July 2026
Notification No. 74/2026 [F. No. 275/16/2026-IT(B)] / SO 3609(E) : TDS Exemption on Aircraft Lease Payments to IFSC Units — 4 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 3 July 2026
Notification No. 65/2025 [F. No. 300196/4/2019-ITA-I] / S.O. 2739(E) — Ministry of Finance 19 June 2025
Notification No. 56 /2025 [F.No.300164/4/2024-ITA-1] / SO 2576(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 12 June 2025
Notification No. 52/2025 [F. No. 300164/5/2024-ITA-1] / SO 2447(E) — Ministry of Finance 30 May 2025
Notification No. 48/2025 [F. No. 300164/3/2024-ITA-1] / SO 2137(E) — Ministry of Finance 14 May 2025

← Notification No. 90/2026-CBDT [F. No. 203/23/2025/ITA-II] / SO 3934(E) · Notification No. 88/2026 [F. No. 503/8/2005-FTD-II] / SO 3926(E) →

What a notification is. A notification is made under a power the Act itself gives, and within that power it is law — unlike a circular, which only binds the department. Its reach is the reach of the enabling provision and no wider, and the date it carries decides from when it works.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is