Notification of Sovereign Wealth Fund under section 10(23FE) of the Income-tax Act, 1961

Last updated: 23 July 2020

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This notification introduces tax exemptions for Sovereign Wealth Funds (SWFs) investing in specified infrastructure businesses in India. The exemption applies to income like dividends, interest, and long-term capital gains made between April 1, 2020, and March 31, 2024, provided the investment is held for at least three years. To apply for this status, SWFs must submit an application in Form I to the Central Board of Direct Taxes (CBDT).

Circular No. 15 of 2020

F No 370142/26/2020-TPL

Government 0 f India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(Tax Policy & Legislation Division)

New Delhi, 22nd July, 2020

Notification of Sovereign Wealth Fund under section to(23FE) of the Income-tax Act, 1961

The Finance Act, 2020, inter alia, inserted clause (23FE) in section 10 the Income-tax Act, 1961 (the Act) to provide for exemption to income of a specified person in the nature of dividend, interest or long-term capital gains arising from investment made by it in India if the investment is made in specified infrastructure business (including business notified vide Notification No 44/2020 dated 06.07.2020, i.e., Infrastructure sub-sectors mentioned in Harmonised Master List updated as on 13.08.2018) during the period from 01.04.2020 to 31.03.2024, and held for at least three years.

2. Specified person for this purpose has been defined to mean wholly owned subsidiaries of Abu Dhabi Investment Authority (ADIA), notified Sovereign Wealth Fund (SWF) and notified Pension Funds (PF), which fulfil conditions specified in the clause or to be prescribed for the PF.

3. In order to facilitate the process of notification of the SWF, the Board, in exercise of powers conferred under section 119 of the Act, hereby specifies that the SWF shall file application in the Form I in the Annexure to this circular. The Form I shall be filed with the Member (Legislation), Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, orth Block, ew Delhi during the financial year 2020-21 and thereafter to the Member, CBDT having supervision and control over the work of Foreign Tax and Tax Research Division.

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FAQ :

This notification provides for tax exemption to Sovereign Wealth Funds (SWFs) on certain incomes arising from investments made in specified infrastructure businesses in India.

Income in the nature of dividend, interest, or long-term capital gains arising from investments made in specified infrastructure businesses is eligible for exemption.

Investments must be made during the period from 01.04.2020 to 31.03.2024, and the investment must be held for at least three years.

Specified persons include wholly owned subsidiaries of Abu Dhabi Investment Authority (ADIA), notified Sovereign Wealth Funds (SWFs), and notified Pension Funds (PFs) that meet the specified conditions.

SWFs must file an application in Form I, as provided in the Annexure to the circular, with the Member (Legislation), Central Board of Direct Taxes (CBDT).

Initially, the application should be submitted to the Member (Legislation), CBDT, Department of Revenue, Ministry of Finance, New Delhi, during the financial year 2020-21. Subsequently, it should be submitted to the Member, CBDT, overseeing the Foreign Tax and Tax Research Division.

Circular No : 15/2020
Source : https://www.incometaxindia.gov.in/communications/circular/circular_15_2020.pdf

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