How to buy a T-Bill on Zerodha

This guide explains how to buy Treasury Bills (T-Bills) through Zerodha’s Kite platform. T-Bills are short-duration sovereign instruments issued by the Government of India and managed by the Reserve Bank of India (RBI). They are zero-coupon instruments: there is no periodic interest payment; instead, the government issues them at a discount to face value and redeems them at face value on the maturity date. The difference between the purchase price and Rs 25,000 constitutes the investor’s return.

This guide covers the secondary market purchase of T-Bills via the NSE retail debt segment. For participation in the primary auction, a separate RBI Retail Direct account (Retail Direct Gilt Account, or RDGA) is required; see How to bid in an RBI primary bond auction via Zerodha for that process.

The encyclopedic background on T-Bills on Zerodha covers instrument mechanics, auction calendar, yield calculation, and tax treatment in full. This article focuses on the operational procedure for buying T-Bills on Kite.

Background: what is a T-Bill

A Treasury Bill is an obligation of the Government of India with a tenor of 91 days, 182 days, or 364 days. The RBI issues T-Bills weekly on behalf of the government through a competitive and non-competitive auction. Institutional investors (banks, mutual funds, primary dealers) participate competitively; retail investors can submit non-competitive bids through the RBI Retail Direct platform to receive allotment at the weighted average yield of the competitive auction.

Once issued, T-Bills are listed on the NSE and BSE debt segments and trade in the secondary market, making them accessible to retail investors through a standard Kite order, no RBI Retail Direct account required.

Key characteristics:

• Zero coupon: No periodic interest. Return is entirely from the discount at which the bill is purchased relative to the Rs 25,000 face value.
• Short tenor: Maximum 364 days, making T-Bills effectively short-term cash parking instruments.
• Zero credit risk: Backed by the Government of India; rated equivalent to sovereign risk.
• High liquidity relative to other G-Sec instruments: Recent 91-day T-Bill series have active secondary market trading.

Step-by-step procedure

Add sufficient funds to your Zerodha ledger

T-Bill trades on the NSE debt segment settle on T+1. Before placing a buy order, ensure the required funds are in your Zerodha trading ledger.

To add funds:

1. Log in to Kite at kite.zerodha.com.
2. Click the Funds tab at the top of the page.
3. Click Add funds.
4. Select your bank, enter the transfer amount, and complete the IMPS or net banking transfer.

The settlement amount for a T-Bill purchase is: number of units × executed price per unit + brokerage. Since T-Bills trade at a discount to Rs 25,000, the per-unit cost is typically Rs 24,400 to Rs 24,990 depending on the tenor and remaining maturity. Add a small buffer, at least 1% above the estimated settlement figure, to ensure the ledger is not insufficient at settlement.

Search for the T-Bill on Kite

Open Kite at kite.zerodha.com. On the web interface, press Ctrl+/ to open the universal search bar. On mobile, tap the search icon.

T-Bills can be found by:

• Tenor abbreviation: Type “91 DAY” or “91D TBILL” or “182D” or “364D” to list currently active series.
• ISIN: If you know the specific series ISIN (e.g., “IN002022XXXX”), enter it directly. ISINs are unique to each weekly issue.
• Maturity date: Searching for a date format such as “TBILL 15JAN2027” can surface the relevant series.

Kite returns results from NSE and BSE debt segments. Select the NSE-listed instrument for better retail liquidity. The instrument name shows the tenor and maturity date, for example “91 DAY T-BILL 28NOV2025”. Add the selected T-Bill to a watchlist using the + icon.

If no T-Bills appear in search, ensure the NSE retail debt segment is not filtered out in your Kite watchlist settings. Some older Kite configurations may need the debt market added to the watchlist manually.

Review the price and yield

Click the T-Bill in your watchlist to open the detail panel.

What to examine:

• Last traded price (LTP): Expressed per unit in rupees. A 91-day T-Bill trading at Rs 24,840 implies an annualised yield of approximately 6.5–6.7%, depending on the exact remaining days to maturity.

• Annualised yield calculation: The formula is:

  Yield = ((Face Value − Purchase Price) ÷ Purchase Price) × (365 ÷ Days to Maturity)

  For a T-Bill bought at Rs 24,850 with 88 days to maturity (face value Rs 25,000):

  Yield = ((25,000 − 24,850) ÷ 24,850) × (365 ÷ 88) ≈ 6.64% per annum

• Market depth: T-Bills for the current benchmark 91-day series typically show reasonable bid-ask depth on NSE. A bid-ask spread of Rs 5 to Rs 20 per unit (Rs 25,000 face value) is common; narrower for liquid series and wider for off-the-run T-Bills that are close to maturity or from older auction cycles.

• Days to maturity: A T-Bill bought 10 days before maturity offers a very small absolute gain; the annualised yield may still look attractive but the actual rupee return per unit is small. Ensure the tenor remaining suits your liquidity needs.

Place a limit buy order with CNC product code

Click the Buy button on the T-Bill instrument (or press B on the keyboard while hovering over the row on the web interface). The order form opens.

Order form fields:

• Product code: Select CNC (Cash and Carry) for delivery-based purchase. The T-Bill units are credited to your demat account. Do not select MIS unless you intend to close the position the same day.
• Order type: Select Limit. A limit order gives price control and is strongly recommended in the T-Bill secondary market where spreads exist. A market order risks executing at the best offer price, which may be significantly above the last traded price if the order book is thin.
• Quantity: Enter the number of units. Each unit represents one T-Bill with a face value of Rs 25,000. The minimum is 1 unit.
• Price: Enter your limit price per unit in rupees. Price Kite at or slightly above the best offer price in the order book if you want a prompt fill. If the best offer is Rs 24,870 and you are comfortable with that yield, set your limit to Rs 24,870. The estimated order value appears below the price field.
• Validity: Standard validity is Day (order expires at end of trading session if unfilled). You can set IOC (Immediate or Cancel) if you want the order filled instantly or not at all.

Review the order summary and click Buy to submit.

Monitor order status and execution

After submission, go to Orders on Kite to monitor the status. For actively traded benchmark T-Bills (the current 91-day series), a limit order close to the best offer typically executes within a few minutes during market hours (9:00 AM to 5:00 PM on trading days for debt markets).

If the order does not execute:

• Check the market depth again. If sellers have moved their offer prices higher, adjust your limit price.
• For off-the-run T-Bills (older series with low remaining days), liquidity may be insufficient. Consider the current benchmark series instead.
• Cancelled orders incur no charge. Unfilled day orders expire automatically at market close.

Verify demat credit on T+1 and plan exit or hold

On the next business day (T+1), the T-Bill units appear in Portfolio → Holdings on Kite and in Zerodha Console under Portfolio → Holdings.

Verify:

• The ISIN of the T-Bill matches the series you purchased.
• The number of units matches your order.
• The average purchase price is consistent with the executed price shown in the trade confirmation.

Holding to maturity (recommended):

At the maturity date, RBI automatically redeems the T-Bills. The face value (Rs 25,000 per unit) is credited directly to your primary bank account linked with Zerodha. You do not need to take any action. The T-Bill units are simultaneously removed from your demat account.

Selling before maturity:

If you need liquidity before the maturity date, you can sell T-Bill units in the secondary market on Kite using the same process as a sell order (select the T-Bill in Holdings, click Sell, use CNC, set a limit price). The sale price will depend on the prevailing yield environment. A rise in short-term rates since your purchase date means a lower sale price and a lower-than-expected return; a fall in rates means a higher sale price.

Tax treatment

T-Bills have a nuanced tax treatment that differs from coupon-paying instruments.

Discount as capital gain or income:

The RBI issues T-Bills at a discount. The difference between the redemption price (Rs 25,000) and the issue price is the investor’s return. For secondary market purchases:

• Held to maturity: The difference between the face value received at maturity (Rs 25,000) and the secondary market purchase price is treated as a short-term capital gain, because T-Bills have a maximum tenor of 364 days and the investor cannot hold them for more than 36 months. Short-term capital gains on listed securities (such as T-Bills listed on NSE) are taxed at slab rate as per the current Finance Act provisions. This is unlike equity shares where STCG is taxed at 20% post-Budget 2024; for debt instruments, slab rate applies.
• Sold before maturity: Any gain or loss on sale in the secondary market is treated as a short-term or long-term capital gain depending on the holding period (less than 36 months = STCG at slab rate; 36 months or more is not applicable for T-Bills given their maximum tenor).

No TDS: There is no Tax Deducted at Source (TDS) on T-Bill redemption or secondary market income for resident individuals. The investor must self-declare the gain in their income tax return under Schedule CG.

Form 16A / TIS: The discount income from T-Bills held in a demat account typically appears in the Annual Information Statement (AIS) under the Proceeds from G-Sec/T-Bill redemption category. Cross-check with your broker’s Annual Global Statement (AGS).

For the broader framework, see capital gains tax in India.

What can go wrong

• Stale LTP leading to poor price estimation. T-Bills may not trade every minute, especially for off-the-run series. The displayed LTP may be from hours earlier. Always use the order book (bid-ask) rather than LTP to estimate the current fair price.
• Settlement amount higher than anticipated. Unlike coupon bonds, T-Bills do not have accrued interest; the settlement amount equals quantity × executed price + brokerage. However, rounding errors in the ledger or unforeseen brokerage charges occasionally cause settlement shortfalls. Maintain a small buffer in the ledger.
• Maturity proceeds credited late. Normally, RBI’s maturity redemption is processed on the maturity date. On rare occasions, processing delays push the credit to the next business day. If funds are not visible within one business day of maturity, contact Zerodha support.
• T-Bill ISIN not found on Kite. T-Bills issued in older auction cycles may have been delisted from retail segment trading. Use the current benchmark series for best secondary market access.
• Tax declaration missed. Since there is no TDS, the income tax liability from T-Bills must be self-reported. Investors unfamiliar with capital gains reporting sometimes overlook this. Use the AIS download from the Income Tax portal to cross-check all T-Bill redemption proceeds for the financial year.

Related guides

• T-Bills on Zerodha, encyclopedic overview of treasury bills
• How to buy a G-Sec on Zerodha Kite
• How to bid in an RBI primary bond auction via Zerodha
• How to buy a bond on Zerodha
• Reserve Bank of India, issuer and regulator for T-Bills
• CDSL, depository where T-Bill units are held
• Capital gains tax in India, slab rate treatment of T-Bill discount

Conflict of interest disclosure

WebNotes Editorial Team has no financial relationship with Zerodha, RBI, NSE, BSE, or any T-Bill-related entity. This guide is produced for informational purposes only and does not constitute investment advice. Readers should verify all details on Zerodha’s official support portal and RBI publications before transacting.

References

1. RBI, Government Securities Market in India: A Primer, Reserve Bank of India, latest edition, rbi.org.in.
2. RBI, Notification: Scheme for Non-competitive Bidding Facility in Treasury Bills, RBI/2020-21/65, 2020.
3. NSE, Retail Debt Market: Treasury Bills segment specifications, nseindia.com.
4. Income Tax Act, 1961, Section 2(42A) (short-term capital asset definition), Section 112 (capital gains on listed securities).
5. Finance Act, 2023, Removal of indexation benefit and flat 20% rate for certain debt mutual funds; note that direct T-Bill holdings are governed by different provisions.
6. Zerodha Support, “How to buy T-Bills on Kite”, support.zerodha.com.
7. RBI, Outstanding Treasury Bills, ISIN list, Securities Market, rbi.org.in.
8. CBDT, Annual Information Statement (AIS) User Guide, incometax.gov.in.