CBDT grants Income Tax Exemption to BPC Penco XVII Corporation u/s 10(23FE)

The Central Board of Direct Taxes (CBDT) vide notification no. S.O. 4755(E) issued on 1st November 2023 has notified the granting of income tax exemption to BPC Penco XVII Corporation under Section 10(23FE) of the Income Tax Act, 1961. Section 10(23FE) grants a tax exemption to specified funds, such as sovereign wealth funds and pension funds, for their income derived from investments in Indian infrastructure made between April 1, 2020, and March 31, 2024, including dividends, interest, and long-term capital gains, provided that specific criteria are met. The exemption to the eligible investments shall be granted only based on the following conditions: (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 subsection (1) of section 139 of the Act; (ii) the assessee shall furnish along with such return a certificate in Form No. 10BBC in respect of compliance to the provisions of clause (23FE) of section 10 of the Act, during the financial year, from an accountant as defined in the Explanation below sub-section (2) of section 288 of the Act, as per the provisions of clause (vi) of rule 2DB of the Income–tax Rules, 1962; (iii) the assessee shall intimate the details in respect of each investment made by it in India during the quarter within one month from the end of the quarter in Form No. 10BBB, as per the provisions of clause (v) of rule 2DB of the Income–tax Rules, 1962; (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 regulated under the law of the Government of Ontario, Canada; (vi) the assessee shall be responsible for administering or investing the assets for meeting the statutory obligations and defined contributions of one or more funds or plans established for providing retirement, social security, employment, disability, death benefits or any similar compensation to the participants or beneficiaries of such funds or plans, as the case may be; (vii) the earnings and assets of the assessee should be used only for meeting statutory obligations and defined contributions for participants or beneficiaries of funds or plans referred to in clause (vi) and no portion of the earnings or assets of the pension fund inures any benefit to any other private person; barring any payment made to creditors or depositors for loan or borrowing taken for the purposes other than for making investment in India; (viii) the assessee shall not have any loans or borrowings , directly or indirectly, for the purposes of making investment in India; and (ix) the assessee shall not participate in the day to day operations of investee 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. The board also mentioned that violation of any of the conditions as stipulated in the said clause (23FE) of section 10 of the Income Tax Act and this notification shall render the assessee ineligible for the tax exemption. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

CBDT grants Income Tax Exemption to BPC Penco XVII Corporation u/s 10(23FE)

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