CBDT Notifies Inbar Holding as Pension Fund Under Sec. 10(23FE)

Notification no. 1/2026, dated 05-01-2026

1. Introduction

The Central Board of Direct Taxes (CBDT) has issued Notification No. 1/2026 dated 05-01-2026, notifying Inbar Holding RSC Limited as a specified pension fund for the purposes of Section 10(23FE) of the Income-tax Act, 1961.

2. Background of the Notification

Section 10(23FE) grants tax exemption to specified pension funds on income earned from eligible investments made in India, subject to prescribed conditions. The provision aims to encourage long-term foreign investment in infrastructure and strategic sectors.

3. Scope and Applicability

The notification applies to eligible investments made by Inbar Holding RSC Limited in India on or after the date of publication of the notification in the Official Gazette and on or before 31-03-2030. Only income arising from such qualifying investments will be eligible for exemption.

4. Conditions Prescribed by CBDT

The exemption is subject to specific conditions, including:
(a) the pension fund must not have any loans or borrowings, directly or indirectly, for making investments in India; and
(b) the pension fund must not participate in the day-to-day operations of the investee, though monitoring rights, including appointment of directors or executive directors, are permitted.

5. Conclusion

By notifying Inbar Holding RSC Limited under Section 10(23FE), CBDT has extended tax exemption benefits to its eligible investments in India, reinforcing the policy objective of attracting stable, long-term pension fund investments while ensuring regulatory safeguards.

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