CBDT notifies Rule for computation of minimum investment & exempt income

Notification No. 50/2022, dated 06-05-2022

Section 10(23FE) of the Income-tax Act provides that income in the nature of dividend, interest, or long-term capital gains of a wholly-owned subsidiary of the Abu Dhabi Investment Authority or a sovereign wealth fund or a pension fund (herein called specified person) shall be exempt from tax.

Exemption under this provision shall be available if the investment is made between 01-04-2020 and 31-03-2024 at least for 3 years in the following entities:

a) An Infrastructure investment trust (InVITs);

b) An enterprise carrying on the business of developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility as defined under Section 80-IA(4)(i) or other notified business; or

c) A Category-I or Category-II Alternative Investment Fund having more than 50% investment in any entity as referred in point (a) or (b) or (d) or (e).

d) A domestic company registered on or after 1st April, 2021 having minimum 75% investments in one or more of the company or enterprise as referred in point (b).

e) A non-banking financial company registered as an infrastructure finance company having minimum 90% of its lending to one or more of the companies or enterprises or entities referred in point (b) above.

f) An Infrastructure debt fund having minimum 90% lending to one or more of the companies or enterprises or entities referred to in point (b) above

The Central Board of Direct Taxes (CBDT) has notified Rule 2DCA for computation of investment referred above in points (c), (d), and (e) and exempt income for the purpose of section 10(23FE).

Every Alternative Investment Fund, a domestic company, and non-banking finance company, which has received funds from any specified person shall furnish the details of funds in Form 10BBD for each previous year during which such funds remain invested. Form 10BBD shall be furnished electronically on or before the due date specified under section 139(1).

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