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Home / News / India /  SWFs have to report investments every three months for tax break: CBDT

NEW DELHI : Sovereign wealth funds including arms of Abu Dhabi Investment Authority (ADIA) will have to report their infrastructure investments in India to the Income Tax department on a quarterly basis if they are to benefit from tax exemption, the Central Board of Direct Taxes (CBDT) said here.

CBDT said in a circular signed off on Wednesday that these entities also have to apply for the tax break and while filing their income tax return, they have to also file the audit report. CBDT also issued the form for these entities to make the application.

The idea of offering tax incentives to sovereign wealth funds is to attract investments into roads, highways, ports and airports as India seeks to expand its infrastructure facilities to support economic growth. The Narendra Modi administration had offered tax incentive for sovereign wealth funds in the Finance Act of 2020, making the income earned by these investors here eligible for a deduction while calculating taxable income.

The tax incentive applies to income earned as dividend, interest or as long-term capital gains in a company carrying on the business of infrastructure development. In order to be eligible for the tax exemption, the investment needs to be made on or before 31 March 2024 and needs to be held for at least three years.

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