Sebi for sops to cos that invest in ZCZP bonds

New Delhi: To encourage social sector spending, markets regulator Sebi has suggested that the government should allow tax benefits to companies investing in zero coupon zero principal bonds (ZCZPs) issued by not-for-profit organisations listed at the social stock exchange. Talking to reporters here on Friday, Sebi’s Whole Time Member Kamlesh Chandra Varshney said the regulator has already sent a proposal to the finance ministry and is hopeful of getting the approval. “We have given the proposal to the government that corporate entities who invest in ZCZPs should get the benefits of CSR (Corporate Social Responsibility). We are hopeful that the government will soon approve the proposal,” Varshney said at an event organised by NSE on SSE here.

Moreover, the CBDT has already clarified that investors or donors buying such bonds will get the tax benefits under section 80G of Income Tax rules, he added. These measures will be pertinent towards inclusive growth of the social sector and will help build trust and expand the donor base for the organisations, he said. The ‘zero-coupon, zero-principal’ are instruments for donating money to non-profit organizations listed on the SSE. The Social Stock Exchange (SSE) is a novel concept in India and such a bourse is meant to serve private and non-profit sector providers by channelling greater capital to them.

The idea was floated by Finance Minister Nirmala Sitharaman in her Union Budget 2019-20 speech. SSE is a separate segment of the existing stock exchanges that bring together social enterprises and donors.