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Bonds

State Development Loans (SDLs)

State-government stock — a spread over G-secs for the same route.

What it is

Dated securities of state governments, auctioned like Central stock and held in the same RDG account. They can trade at a spread to Central G-secs, reflecting state finances, duration and liquidity.

Min ticket: Rs.10,000 face in primary auctions (varies by auction) · No demat — RBI/BLA account

How to buy it

  • Same Retail Direct account — SDL auctions appear alongside Central auctions.
  • Coupons half-yearly, principal at maturity, secondary on NDS-OM.
  • Compare the spread over the Central curve before buying.

Costs

  • No RBI scheme fees
  • Wider bid-ask than Central stock

Liquidity

NDS-OM listed but thinner than Central G-secs.

Regulation

RBI auctions on behalf of states; CCIL settlement via NDS-OM.

Risks that bite

  • Duration risk plus state-specific spread widening
  • Lower secondary liquidity than Central stock
Compare on Retail Direct →

Tax FAQ

How is State Development Loans (SDLs) taxed?

Interest is taxed at your slab. Transfer or redemption gains follow the post-23-Jul-2024 rules: listed paper held over 12 months is LTCG at 12.5% without indexation, short-term gains join income at slab, and unlisted bonds are always deemed short-term under section 50AA.

Educational, not advisory — and never a quote. LetsInvest is a research publication, not a SEBI-registered investment adviser, and we run no bond-price or yield feed. YTM, ladder and tax outputs are illustrations of numbers you enter. Confirm anything that matters on RBI Retail Direct or the issuer's offer document before you act.

Sources

Reviewed 24 Sept 2026. Yields move — the RBI portal, CCIL and the tax department are the authority, and this hub links straight to them.