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TMI BlogIncome-tax (36th Amendment) Rules, 2016 - Investment of Providend fund moneys - INVESTMENT PATTERNX X X X Extracts X X X X X X X X Extracts X X X X ..... , as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956, the principal whereof and interest whereon is fully and unconditionally guaranteed by the Central Government, or any State Government; and/or (c) units of mutual funds set up as dedicated funds for investment in Govt. securities and regulated by the Securities and Exchange Board of India. Minimum forty-five per cent. and upto fifty per cent. ii. Debt Instruments and Related Investments: (a) Listed (or proposed to be listed in case of fresh issue) debt securities issued by bodies corporate, including banks and public financial institutions, which have a minimum residual maturity period of three years from the date of investment; (b) Basel III Tier-I bonds issued by scheduled commercial banks under the guidelines issued by the Reserve Bank of India; (c) Rupee Bonds having an outstanding maturity of at least three years issued by institutions of the International Bank for Reconstruction and Development, International Finance Corporation and Asian Development Bank; (d) Term Deposit receipts of not less than one year duration issued by scheduled commercial banks, which satisfy the following conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Related Investments (a) Money market instruments; (b) Units of liquid mutual funds regulated by the Securities and Exchange Board of India. (c) Term Deposit Receipts of up to one year duration issued by such scheduled commercial banks which satisfy all the conditions mentioned in sub-clause (d) of clause (ii). Upto five per cent. iv. Equities and Related Investments (a) Shares of body corporates listed on Bombay Stock Exchange or National Stock Exchange, which have,- (i) Market capitalization of not less than five thousand crore rupees as on the date of investment; and (ii) Derivatives with the shares as underlying, traded in either of the two stock exchanges; and/or (b) Units of mutual funds regulated by the Securities and Exchange Board of India, which have minimum sixty five per cent. of their investment in shares of body corporates listed on Bombay Stock Exchange or National Stock Exchange; (c) Exchange Traded Funds/ Index Funds regulated by the Securities and Exchange Board of India that replicate the portfolio of either Bombay Stock Exchange Sensex Index or National Stock Exchange Nifty fifty Index; (d) Exchange Traded Funds issued by Securities and Exchange Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single rating of AA or above by a domestic or international rating agency will be acceptable: Provided also that the debt securities covered under sub-clause (b) of clause (i) of the said Table shall be excluded from the securities covered under clause (ii) of the said Table. Provided also that in sub-clause (e) of clause (ii), fresh investment in Debt Mutual Funds shall not be more than five per cent. of the fresh accretions invested in the year and the portfolio invested in them shall not exceed five per cent. of the total portfolio of the fund at any point in time. Provided also that the investment under sub-clause (a), (b) and items (i) to (iv) of (f) of clause (ii) of the said Table shall be made only in such securities which have minimum AA rating or equivalent in the applicable rating scale from at least two credit rating agencies registered with Securities and Exchange Board of India under Securities and Exchange Board of India (Credit Rating Agency) Regulation, 1999. Provided also that in case of item (iii) of the sub- clause (f) of clause (ii) of the said Table the ratings shall relate to the Non-Banking Financial Company and for item (iv) of the sub-clause (f) of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rating scale from at least two credit rating agencies registered by the Securities and Exchange Board of India under Securities and Exchange Board of India (Credit Rating Agency) Regulations, 1999: Provided also that in case of the sub-clause (b) and (d) of the clause (v) of the said Table, the ratings shall relate to the rating of the sponsor entity floating the trust: Provided also that if the securities/entities have been rated by more than two rating agencies, the two lowest of the ratings shall be considered: Provided also that any proceeds arising out of exercise of put option, tenure or asset switch or trade of any asset before maturity can be invested in any of the permissible categories in the manner that at any given point of time the percentage of assets under that category shall not exceed the maximum limit prescribed for that category and also shall not exceed the maximum limit prescribed for the sub-categories, if any. However, asset switch because of any Reserve Bank of India mandated Government debt switch would not be covered under this restriction. Provided also that fresh accretions to the fund shall be invested in the permissible categories specified in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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