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Centre gives tax concession to five SWFs

Singapore’s SWFs Chiswick Investment Pte. Ltd, Stretford Investment Pte. Ltd, Dagenham Investment Pte. Ltd, Anahera Investment Pte. Ltd, and Bricklayers Investment Pte. Ltd have been given relief under section 10 of the Income Tax Act which deals with earnings is not to be included in the taxable income. (Indranil Bhoumik/Mint)Premium
Singapore’s SWFs Chiswick Investment Pte. Ltd, Stretford Investment Pte. Ltd, Dagenham Investment Pte. Ltd, Anahera Investment Pte. Ltd, and Bricklayers Investment Pte. Ltd have been given relief under section 10 of the Income Tax Act which deals with earnings is not to be included in the taxable income. (Indranil Bhoumik/Mint)

  • The government is betting on the multiplier effect infrastructure could have on job creation and economic turnaround

NEW DELHI : The income tax department has granted tax exemption to five Singapore-based sovereign wealth funds (SWFs) for their earnings from infrastructure investments made in India between now and March 2024.

The move comes a day after giving similar relief to four pension funds aimed at supporting infrastructure growth. The government is betting on the multiplier effect infrastructure could have on job creation and economic turnaround.

Separate orders from the tax department issued on Wednesday showed that Singapore’s SWFs Chiswick Investment Pte. Ltd, Stretford Investment Pte. Ltd, Dagenham Investment Pte. Ltd, Anahera Investment Pte. Ltd, and Bricklayers Investment Pte. Ltd have been given relief under section 10 of the Income Tax Act which deals with earnings is not to be included in the taxable income. Investors will get full tax exemption on income from interest, dividend and long-term capital gains.

The tax concession comes despite the stated policy to phase out tax breaks and indicates policymakers’ intent to have more sources of long-term finance for projects. It also indicates the interest among long-term investors for projects in India.

The government’s pipeline of identified projects have a total cost of over Rs100 trillion. The risks involved in long gestation infrastructure projects means normal bank lending is not enough to finance these projects. The proposed state-run development finance institution National Bank for Financing Infrastructure and Development will be able to lend about Rs5 trillion in the next few years by tapping multilateral agencies and market sources.

The tax break is granted subject to riders, including regular disclosure of investments and a three-year lock in period of investments. Earlier, UAE’s sovereign wealth fund MIC Redwood 1 RSC Ltd. was given the same incentive.

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