Quick Summary
The Central Board of Direct Taxes (CBDT) has issued Circular No. 03/2026 dated March 30, 2026, introducing a structured compliance and reporting mechanism for Sovereign Wealth Funds (SWFs) under the Income-tax Act, 2025. The circular lays down procedures for notification, application, and ongoing r
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FAQ :
The circular establishes a clear compliance and reporting mechanism for Sovereign Wealth Funds (SWFs) under the Income-tax Act, 2025, aiming to streamline tax exemptions for foreign sovereign investors in India's infrastructure sector.
Eligible SWFs can claim tax exemption on dividend income, interest income, certain specified sums, and long-term capital gains on investments made in specified infrastructure businesses.
SWFs seeking notification must use Form I for their application, and all notified SWFs must submit quarterly statements of their investments using Form II.
The new framework comes into force from April 1, 2026, and is applicable from the Tax Year 2026-27 onwards.
No, Category I SWFs that are already notified do not need to file Form I again, but they must comply with the new quarterly reporting requirement via Form II.
These changes are expected to enhance transparency, strengthen compliance monitoring, facilitate smoother entry for global sovereign funds, and boost infrastructure financing in India.
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