SWF have to report investments quarterly for tax break: CBDT

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Sovereign wealth funds (SWFs) which include arms of Abu Dhabi Investment Authority (ADIA) will have to document their infrastructure investments in India to the Income Tax branch on a quarterly basis if they are to gain from tax exemption, the Central Board of Direct Taxes (CBDT).

Central Board of Direct Taxes mentioned in a spherical signed off on Wednesday that these entities also have to follow for the tax break and while submitting their income tax return, they have to moreover file the audit report. Central Board of Direct Taxes (CBDT) additionally issued the form for these entities to make the application.

The thought of imparting tax incentives to sovereign wealth cash is to appeal to investments into roads, highways, ports and airports as India seeks to enlarge its infrastructure amenities to guide economic growth. 

The Narendra Modi administration had offered tax incentive for sovereign wealth funds (SWFs) in the Finance Act of 2020, making the income earned through these investors here eligible for a deduction whilst calculating taxable income.

The tax incentive applies to profits earned as dividend, interest or as long-term capital gains in an enterprise carrying on the enterprise of infrastructure development. In order to be eligible for the tax exemption, the funding wants to be made on or before 31 March 2024 and wants to be held for at least three years.

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