In a major relief for Sovereign Wealth Funds (SWFs) and Pension Funds (PFs), the Ministry of Finance has extended the deadline for availing income-tax exemptions under Section 10(23FE) of the Income-tax Act, 1961. According to CBDT Notification No. 113/2025 issued on July 11, 2025, the new cut-off date for investments qualifying for exemption has been extended from March 31, 2025, to March 31, 2030.
This amendment, notified under S.O. 3167(E), modifies the earlier Notification No. 93/2024 dated July 19, 2024, which set the previous deadline. The change is made in accordance with sub-clause (iv) of clause (c) of Explanation 1 to Section 10(23FE), and is aimed at encouraging long-term infrastructure investments in India.
What This Means
- Eligible SWFs and PFs will now enjoy tax exemptions on income earned from investments made up to March 31, 2030, rather than the earlier March 31, 2025 deadline.
- This move is expected to boost foreign capital inflows into priority sectors like infrastructure, logistics, and power, aligning with India's vision of becoming a $5 trillion economy.
- It also provides more flexibility to global institutional investors looking to deploy funds in India under the government's strategic investment framework.
The notification explicitly states that this amendment is effective retrospectively from April 1, 2025, up to the date of publication in the Official Gazette.
This extension underscores the Indian government's continued commitment to fostering a favorable tax and regulatory environment for long-term institutional investors.
Background
Section 10(23FE) was introduced in the Union Budget 2020 to exempt income in the nature of dividend, interest, or long-term capital gains arising from investments made by specified funds in India, subject to certain conditions. It plays a key role in attracting patient capital into India's infrastructure and allied sectors.
Official copy of the notification has been attached
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