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CBDT inserts rule 2DCA for computation of minimum investment and exempt income under Section 10 (23FE)

Last updated: 10 May 2022


MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 6th May, 2022

G.S.R. 341(E).—In exercise of the powers conferred by the Explanation 3 to clause (23FE) of section 10 and fourth, fifth and sixth provisos to clause (23FE) of section 10, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely :─

CBDT inserts rule 2DCA for computation of minimum investment and exempt income under Section 10 (23FE)

1. Short title and commencement.—

(1) These rules may be called the Income-tax Amendment (Thirteenth Amendment) Rules, 2022.
(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 2DC, the following rule shall be inserted, namely: —

"2DCA. Computation of minimum investment and exempt income for the purposes of clause (23FE) of section 10 of the Act.—

(1) For the purposes of clause (23FE) of section 10 of the Act, the percentages referred to in item (c), item (d) and item (e) of sub-clause (iii) , and the exempt income referred to in the fourth, fifth and sixth proviso shall be calculated in accordance with this rule.

(2) The percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-
(A+C+D) * 100
 B

Where,-

A = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act or in an Infrastructure Investment Trust referred to in sub-clause (i) of clause (13A) of section 2 of the Act;

B= Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year;

C = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more domestic companies referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, multiplied by the percentage for those domestic company or companies determined in accordance with sub-rule (3); and

D = Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more nonbanking financial companies referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, multiplied by the percentage for those non-banking financial company or companies determined in accordance with sub-rule (4):

Provided that in the case of financial year 2021-22 being the relevant previous year, the amounts A, B, C and D shall be calculated using the aggregate of eligible investments, appearing in the balance sheet of the financial year 2021-22 as on the 31st day of March 2022:

Provided further that in a case where the relevant previous year is the year in which the first investment is made by the Alternative Investment Fund, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant previous year as on the last date of that year:

Provided also that the amount A, C and D shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the Alternative Investment Fund:

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year. 

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