CBDT Extends Section 10(23FE) Investment Deadline From March 31, 2025 to March 31, 2030

Notification no. 74 to 113, dated 11-07-2025

1. Overview of Section 10(23FE)

Section 10(23FE) of the Income-tax Act, 1961 provides an income tax exemption to certain specified foreign funds that invest in infrastructure entities in India. This section was introduced as part of the government’s broader strategy to boost capital inflow into the infrastructure sector, which is critical for long-term economic growth.

2. Objective Behind the Exemption

The primary purpose of this exemption is to attract long-term foreign capital by offering tax incentives to eligible investors. Infrastructure development often requires significant financial commitments and long gestation periods. By providing a tax-free return on such investments, the government aims to reduce the effective cost of capital and promote private participation in core sectors such as power, roads, ports, and logistics.

3. Eligible Investors Under Section 10(23FE)

The exemption under this section is applicable to the following categories of foreign investors:

• Sovereign Wealth Funds (SWFs)
• Pension Funds
• Any other fund as notified by the Government, subject to specified conditions

These investors must be notified by the Central Government and should meet the eligibility criteria laid out in the relevant rules and guidelines.

4. Nature of Investments Required

To claim exemption, the investment must be:

• In the form of debt or equity
• Made in specified Indian infrastructure entities such as Category-I or Category-II Alternate Investment Funds (AIFs), Infrastructure Investment Trusts (InvITs), or companies engaged in the business of developing, maintaining, or operating infrastructure facilities
• Held for a minimum duration as prescribed (usually 3 years or more)

5. Timeline for Eligible Investments

Initially, the exemption was available for investments made up to March 31, 2025. However, in view of the continued need for infrastructure capital and to maintain global investor confidence, the government extended this timeline.

6. Extension of Investment Deadline – Finance Act, 2025

The Finance Act, 2025 has extended the deadline for making eligible investments under Section 10(23FE) by five years, i.e., from March 31, 2025 to March 31, 2030. This move is expected to:

• Provide a longer window for global funds to evaluate and commit investments
• Align with India’s infrastructure growth plans under various national programs
• Maintain the continuity of foreign investment inflow in strategic sectors

7. CBDT’s Role in Implementing the Extension

Following the amendment made through the Finance Act, the Central Board of Direct Taxes (CBDT) has issued revised notifications under Section 10(23FE) to give legal effect to the extended investment timeline. These notifications amend earlier ones and now explicitly allow eligible funds to make qualifying investments in India up to March 31, 2030.

8. Conclusion

The extension of the investment deadline under Section 10(23FE) reaffirms India’s commitment to fostering an investor-friendly environment for long-term capital in infrastructure. It offers foreign funds additional time and certainty to plan and deploy their resources in India, further supporting the country’s mission of building world-class infrastructure.

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