CBDT Notifies Amendment in Rule 2F for Setting Up of Infrastructure Debt Fund as NBFC

Notification F. No.370142/9/2024-TPL, dated 07-02-2025

The Central Board of Direct Taxes (CBDT) has amended Rule 2F, which provides that an Infrastructure Debt Fund (IDF) shall be set up as a Non-Banking Financial Company (NBFC). The IDF shall conform to and satisfy the conditions laid down in the regulatory framework provided by the Reserve Bank of India (RBI).

The amended rule provides that the funds of the Infrastructure Debt Fund shall be invested only in:

a) post-commencement operation date infrastructure projects which have completed at least one year of satisfactory commercial operations; or

b) toll-operate-transfer projects as the direct lender.

‘Toll-operate-transfer projects’ is the new addition made by Rule 2F.

In respect of raising funds, the Infrastructure Debt Fund (IDF) can now raise funds through loans under External Commercial Borrowings (ECB).

For external commercial borrowings by the Infrastructure Debt Fund, the tenure must be at least five years, and such borrowings cannot be obtained from foreign branches of Indian banks.

The new rule also updates investment restrictions for Infrastructure Debt Funds (IDFs) by replacing the term “sponsor” with “specified shareholder.” This means IDFs can no longer invest in projects where a specified shareholder, its associated enterprise, or its group has a substantial interest, instead of the earlier restriction based on sponsorship.

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