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Circular No. 9 of 2022 F. No.370142/2/2022-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (TPL Division) Dated: 9th May, 2022 Sub.: Guidelines under clause (23FE) of section 10 of the Income-tax Act, 1961 - reg. The Finance Act, 2020, in
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FAQ :
The guidelines are intended to clarify the tax exemption provisions under clause (23FE) of Section 10 of the Income-tax Act, 1961, for certain investors making infrastructure investments in India.
The exemption is available to specified persons, including wholly-owned subsidiaries of the Abu Dhabi Investment Authority, sovereign wealth funds, and pension funds, on their income from qualifying infrastructure investments in India.
Eligible income includes dividends, interest, and long-term capital gains arising from investments made in infrastructure in India.
If an investment is transferred before the mandatory three-year holding period, any income previously exempted under clause (23FE) will become taxable in the year of transfer, and capital gains on the transfer will also not be exempt.
Yes, an eligible infrastructure entity carrying on other businesses can still qualify if the profit before tax from its eligible infrastructure activity is 50% or more of its total profit before tax. Exempt income will be calculated proportionately.
The exemption period for investments made under clause (23FE) is from April 1, 2020, to March 31, 2024.
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