What is a ZCZP Bond? Complete Guide to Donating via Social Stock Exchange
A ZCZP Bond (Zero Coupon Zero Principal bond) is a unique financial instrument introduced by SEBI (Securities and Exchange Board of India) specifically for the Social Stock Exchange (SSE). Unlike regular bonds, ZCZP bonds pay no interest and return no principal — they are pure donation instruments that help Non-Profit Organizations (NPOs) raise funds from the public through stock exchanges.
Key Features of ZCZP Bonds
Feature
Detail
Full Form
Zero Coupon Zero Principal Bond
Interest (Coupon)
Zero — no interest paid to investor
Principal Return
Zero — no money returned at maturity
Purpose
Social impact donation to registered NPOs
Tax Benefit
80G deduction (50-100% of donation)
Listed On
BSE Social Stock Exchange (SSE)
Minimum Investment
₹10,000 (per SEBI guidelines)
How to Donate via Social Stock Exchange — Step by Step
Open a demat account with a SEBI-registered broker (Zerodha, HDFC Securities, etc.)
Visit BSE's Social Stock Exchange portal: bsesse.com
Browse registered NPOs and their fundraising projects
Select an NPO and the ZCZP bonds they've issued
Buy the bonds through your demat account (minimum ₹10,000)
Receive 80G tax receipt from the NPO within 30 days
Track your social impact report — NPOs must report impact annually
Tax Benefit Under Section 80G
Donations via ZCZP bonds qualify for Section 80G deduction. For donations to approved NPOs on the SSE, you can claim 50% deduction (or 100% for specific organizations). For example, a ₹10,000 donation at 50% deduction effectively costs only ₹7,000 for a taxpayer in the 30% tax bracket.
Frequently Asked Questions
A regular bond pays periodic interest (coupon) and returns the invested principal at maturity — it is an investment product. A ZCZP bond pays zero interest and zero principal — it is purely a donation instrument. You are donating your money to a social cause and receiving a tax benefit under Section 80G in return, not a financial return.
Yes. The Social Stock Exchange (SSE) is regulated by SEBI. Only SEBI-registered and verified Non-Profit Organizations can list on the SSE. NPOs must submit audited financial statements, impact reports, and governance disclosures. This provides significantly more transparency and accountability than unregulated crowdfunding platforms or direct donations.
NRIs with a valid NRO demat account can participate in the Social Stock Exchange and purchase ZCZP bonds. However, the Section 80G tax benefit applies only to Indian residents filing Indian income tax returns. NRIs should consult a tax advisor to understand the applicable deduction rules under their country's double taxation treaty with India.
The minimum investment (donation) for ZCZP bonds on the Social Stock Exchange is ₹10,000 as per SEBI guidelines. Individual bonds are typically priced at ₹1,000 face value each, with a minimum lot size of 10 bonds (₹10,000). Some NPOs may set higher minimums depending on their fundraising structure.
After purchasing ZCZP bonds, the NPO is obligated to issue a Section 80G donation receipt within 30 days. The receipt will be sent to your registered email or can be collected from the NPO directly. You use this receipt when filing your Income Tax Return (ITR) to claim the deduction. Keep the receipt for at least 7 years in case of tax scrutiny.
