U/s 10(23FE) of Income Tax Act 1961 - Central Government specifies the sovereign wealth fund namely, the MIC Redwood 1 RSC Limited, Abu Dhabi, United Arab Emirates - 89/2020 - Income Tax

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION NO. 89/2020 New Delhi, the 2nd November, 2020 (INCOME-TAX) S.O. 3952(E). -In exercise of powers conferred by sub-clause (vi) of clause (b) of the Explanation to clause (23FE) of section 10 of the Income-tax Act, 1961 (hereinafter referred to as the Act ), the Central Government hereby specifies the sovereign wealth fund, namely, the MIC Redwood 1 RSC Limited, Abu Dhabi, United Arab Emirates, (hereinafter referred to as the assessee ) as the specified person for the purposes of the said clause in respect of the investment made by it in India on or after the date of publication of this notification in the Official Gazette but on or before the 3 [ 31st day of March, 2025 ] (hereinafter referred to as said investments ) subject to the fulfilment of the following conditions, namely:- (i) the assessee shall file return of income, for all the relevant previous years falling within the period beginning from the date in which the said investment has been made and ending on the date on which such investment is liquidated, on or before the due date specified for furnishing the return of income under sub-section (1) of section 139 of the Act; (ii) the assessee shall get its books of account audited for the previous years referred to in clause (i) by any accountant specified in the Explanation below sub-section (2) of section 288 of the Act and furnish the Audit Report in the format annexed as Annexure to this notification herewith at least one month prior to the due date specified for furnishing the return of income under sub-section (1) of section 139 of the Act. (iii) the assessee shall furnish a quarterly statement within one month from the end of each quarter electronically in Form II as annexed to the Circular No 15 of 2020, dated the 22nd July, 2020 with F. No. 370142/26/2020-TPL, issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes (Tax Policy and Legislation Division), in respect of each investment made by it during the said quarter; (iv) the assessee shall maintain a segmented account of income and expenditure in respect of such investment which qualifies for exemption under clause (23FE) of section 10 of the Act; (v) the assessee shall continue to be owned and controlled, directly or indirectly, by the Government of the Abu Dhabi and at no point of time any other person should have any ownership or control, directly or indirectly, in the assessee; (vi) the assessee shall continue to be regulated under the law of the Government of Abu Dhabi; 1 [ (vii) the earnings of the assessee shall be credited either to the account of the Government of Abu Dhabi or to any other account designated by that Government so that no portion of the earnings inures to any private person barring any payment made to creditors or depositors for loan or borrowing [as defined in sub-clause (a) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Act] taken for the purposes other than for making investment in India; (viii) the assessee shall not have any loans or borrowings [as defined in sub-clause(a) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Act] , directly or indirectly, for the purposes of making investment in India; (ix) the asset of the assessee shall vest in the Government of Abu Dhabi upon dissolution barring any payment made to creditors or depositors for loan or borrowing taken for the purposes other than for making investment in India; (x) the assessee shall not participate in the day to day operations of investee (as defined in clause (i) of Explanation 2 clause (23FE) of section 10 of the Act) but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in the day to day operations of the investee. ] 2. Violation of any of the conditions as stipulated in the said clause (23FE) and this notification shall render the assessee ineligible for the tax exemption. 3. This notification shall come into force from the date of its publication in the Official Gazette. 2 [ ANNEXURE Audit report to be filed by the Sovereign Wealth Fund claiming exemption under clause (23FE) of section10 of the Income-tax Act, 1961 Part I *I/we report that the statutory audit of M/s (Name and address of the assessee with Permanent Account Number or Aadhaar Number), the particulars of which are given in Part II was conducted by *me/us/M/s. .. .as per the requirement under the Notification No ../ dated published in the Official Gazette on ....... 2. In *my/our opinion and to the best of *my/our information and according to examination of books of account including other relevant documents and explanations given to *me/us, it is certified that the assessee *has/has not complied with the conditions as laid down under clause (23FE) of section 10 of theIncome-taxAct,1961 and those provided in the said notification specifying the assessee being the Sovereign Wealth Fund as specified person for the purposes of claiming exemption under the said clause(23FE). 2.1 *The conditions not complied with by the assessee are as under:- (a) . . (b) . . 3. In *my/our opinion and to the best of *my/our information and according to examination of books of account including other relevant documents and explanations given to *me/us, the particulars given in the Part II are true and correct subject to the following observations/qualifications, if any, namely:- (a) . . (b) . . Part II 1. Name of the Assessee : 2. PAN/AADHAAR : 3. Previous Year : 4. Total Income of the Assessee during the previous year 5. Total amount of income eligible for exemption under clause (23FE) of section 10 of the Income-tax Act, 1961 (as per details in column 11 of table at item no. 6): 6. The opening balance (i.e. the closing balance as on the last date of the preceding financial year) of the investment made which is eligible for exemption under clause (23FE) of section 10 is ______________(in rupees) and details of the investment by the Sovereign Wealth Fund (SWF) during the period are as under: Sl. No. Date of inve-stment Amount of inves-tment Nature of investment (Instruc- tion 4) Nature of income (instruc- tion 5) Amount of income on investment during the year Details of the entity in which Investment made Amount of income which is eligible for exemption under clause (23FE) of section 10 (Attach calculation sheet as per relevant rules) Nature (inst-ruction 6) Name PAN In case if nature of entity code is 3/4/5, whether the entity has made minimum investment of 50 or75 or 90 percent as required in item (c) or (d) or (e) of sub-clause (iii) of clause (23FE) of section 10 (Attach calculation sheet as per relevant rules) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 1. 2. Total 7. *the SWF has not sold any of the investments made for the purposes of exemption under clause (23FE) of section 10 of the Income-tax Act, 1961 before the expiry of three years from the date on which the investment was made in respect of the said exemption/the SWF has sold certain investments made for the purposes of exemption under clause (23FE) of section 10 of the Income-tax Act, 1961 before the expiry of three years from the date on which the investment was made in respect of the said exemption, the details of which are as under: Sl. No. Date of investment Nature of investment (Instruction 4) Nature of income (instruction 5) Amount of income on investment during the year Details of the entity in which Investment made Date of sale Nature of entity (instruction 6) Name PAN (1) (2) (3) (4) (5) (6) (7) (8) (9) 1. 2. Total 8. The SWF satisfies all the conditions required for the purposes of exemption under clause (23FE) of section 10 of the Income-tax Act, 1961, that is, - a) Whether the government of foreign country wholly owns and controls the SWF, directly or indirectly Yes/No b) Mention the name of the government of foreign country which owns and controls the SWF, directly or indirectly c) Whether the government of foreign country owns and controls the SWF, directly or indirectly Directly/ Indirectly d) In case if government of foreign country owns and controls the SWF, indirectly give details of the chain of ownership e) Name of the law under which the SWF is set up and regulated f) Whether the earnings of the said fund are credited either to the account of the Government of that foreign country or to any other account designated by that Government so that no portion of the earnings inures any benefit to any private person barring any payment made to creditors or depositors for loan taken or borrowing for the purposes other than for making investment in India. Yes/No g) Whether the asset of the said fund vests in the Government of such foreign country upon dissolution barring any payment made to creditors or depositors for loan taken or borrowing for the purposes other than for making investment in India. Yes/No h) If answer to (f) or (g) is No, then provide the following details: (i)Name of such private person (ii)Amount of benefit provided during the year i) Whether it participates in the day to day operations of any of the investee, as defined in Explanation 3 to clause (23FE) of section 10, barring any monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director Yes/No j) If answer to (i) is yes, then provide the following details: (i) Name of such investee (ii) PAN of the investee (iii) Amount of investment in such investee at the end of the year k) Whether it has complied with the requirement of intimation of the details of investment made by it in India in Form No. II issued vide circular No 15/2020 dated 22.07.2020 Yes/No l) Whether it has loans or borrowings, as defined in Explanation 2 to clause (23FE) of section 10, directly or indirectly, for the purposes of making investment in India Yes/No m) If answer to (l) is yes, then provide the following details: (i) Name of the person from whom such loan or borrowing has been taken (ii) Amount of loan or borrowing at the beginning of the year (iii) Amount of loan or borrowing received during the year (iv) Amount of loan or borrowing repaid during the year (v) Amount of loan or borrowing at the end of the year n) Whether separate segmented account is maintained for income and investment in respect of investment which qualifies for exemption under clause (23FE) of section 10 of the Act Place: Date: (Signature and stamp/Seal of the signatory) Name of the signatory . Full address . Membership No UDIN .. .. Instructions: 1. *Delete whichever is not applicable. 2. This certificate is to be given by an accountant as defined in the Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961. 3. An investee shall have the same meaning as in claues (i) of Explanation 2 to clause (23FE) of section 10 of the Act and Loan and borowing shall have the same meaning as in sub-clause(b) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Act. 4. One of the following codes is to be selected: Nature of Investment Code Debt 1 Equity 2 Preference Shares 3 Others (Please specify) 4 5. One of the following codes is to be selected: Nature of Income Code Interest 1 Dividend 2 Capital Gains 3 Others 4 6. One of the following codes is to be selected: Nature of entity in which investment is made Code Business Trust referred to in item (a) of sub-clause (iii) of clause (23FE) of section 10 1 Company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 2 Alternative Investment Fund referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 3 Domestic company referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 4 Infrastructure Finance Company/Infrastructure Debt Fund-NBFC referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 5 ] [F. No. 370133/16/2020-TPL] ANKIT JAIN, Under Secy. (Tax Policy and Legislation Division) ************* NOTES:- 1. Substituted vide NOTIFICATION NO. 11/2022 dated 25-01-2022 before it was read as (vii) the earnings of the assessee shall be credited either to the account of the Government of Abu Dhabi or to any other account designated by that Government so that no portion of the earnings inures to any private person; (viii) (a) the assessee does not and shall not have any loan, borrowing, advances, deposits or investment in it of any kind directly or indirectly from any person other than the Government of the Abu Dhabi; (b) The assessee shall only invest the surplus fund of the Government of Abu Dhabi and that Government shall not raise any loan, debt etc. directly or indirectly, from the market or any entity to make the said investment; (ix) the asset of the assessee shall vest in the Government of Abu Dhabi upon dissolution; (x) the assessee does not and shall not undertake any commercial activity whether within or outside India other than the said investment or investment of similar nature; (xi) the assessee shall have monitoring mechanism to protect the said investment with investee but shall not manage day to day operations of the investee or appoint executive directors in the investee company or participate in the decision making process or control them; and (xii) the assessee shall not carry out asset management activity for any person other than itself. 2. Substituted vide NOTIFICATION NO. 11/2022 dated 25-01-2022 before it was read as, ANNEXURE Audit report to be filed by the Sovereign Wealth Fund claiming exemption under clause (23FE) of section 10 of the Income -tax Act, 1961 Part I *I/we report that the statutory audit of M/s. ........... . (Name and address of the assessee with Permanent Account Number or Aadhaar Number), the particulars of which are given in Part II was conducted by *me/ us/ M/s. .. . as per the requirement under the Notification No ../ dated published in the Official Gazette on .... 2. In *my/ our opinion and to the best of *my/ our information and according to examination of books of account including other relevant documents and explanations given to *me/us, it is certified that the assessee *has/ has not complied with the conditions as laid down under clause (23FE) of section 10 of the Income-tax Act, 1961 and those provided in the said notification specifying the assessee being the Sovereign Wealth Fund as specified person for the purposes of claiming exemption under the said clause (23FE). 2.1 *The conditions not complied with by the assessee are as under:- (a) . . (b) . . 3. In *my/our opinion and to the best of *my/ our information and according to examination of books of account including other relevant documents and explanations given to *me/us, the particulars given in the Part II are true and correct subject to the following observations/qualifications, if any, namely:- (a) . . (b) . . Part II 1. Name of the Assessee : 2. PAN/ AADHAAR : 3. Previous Year : 4. Total Income of the Assessee during the previous year: 5. Amount of income eligible for exemption under clause (23FE) of section 10 of the Income-tax Act, 1961 : Place: Date: **(Signature and stamp/ Seal of the signatory) Name of the signatory Full address Membership No UDIN .. Notes: 3. *Delete whichever is not applicable. 4. This report has to be signed by an accountant falling within the meaning of expression accountant as provided in the Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961. 3. Substituted vide Notification No. 54/2024 dated 18-07-2024 before it was read as, 31st day of March, 2024