It is the first foreign SWF to get 100 per cent tax exemption in the case of income from interest, dividend, and long-term capital gains for its investment in infrastructure.
In line with the Budget announcement, the government has allowed income-tax exemption to Abu Dhabi’s sovereign wealth fund (SWF), MIC Redwood 1 RSC, for making long-term investments in India in specified priority sectors of infrastructure.
It is the first foreign SWF
to get 100 per cent tax exemption in the case of income from interest,
dividend, and long-term capital gains for its investment in infrastructure.
The Central Board of Direct
Taxes (CBDT) on Monday announced this.
The government, under the
Finance Act, 2020, had allowed tax exemption for SWFs and pension funds in the
case of incomes from investment in 34 key infrastructure sectors, including
hotels, cold chains, educational institutions, hospitals, and gas pipelines.
Under the scheme,
investment has to be made before March 31, 2024 and with a minimum lock-in
period of three years.
“Any income in the nature
of dividend, interest, or LTCG (long-term capital gains) arising from an
investment made by Abu
Dhabi’s SWF on or after November 2, 2020, but on or before March 31, 2024,
shall be entitled to exemption if specified conditions are met,” said a
government official.
The sub-sectors under the
scheme include infrastructure for special economic zones, textile parks and
agriculture markets, telecom towers, electricity generation, and transmission
and distribution, besides ports and airports.
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