CBDT Extends Income Tax Exemption Timelines by Six Years for Sovereign Wealth and Pension Funds u/s 10(23FE) [Read Notification]
CBDT extended by six years the tax exemption timelines under Section 10(23FE) for sovereign wealth funds, pension funds, and other notified investors
The Central Board of Direct Taxes (CBDT), Ministry of Finance, has issued Notification G.S.R. 598(E) dated September 1, 2025, introducing the Income-tax (Twenty-Fifth Amendment) Rules, 2025. This notification amends Rule 2DCA of the Income-tax Rules, 1962, and provides a six-year extension for availing tax exemptions under Section 10(23FE) of the Income-tax Act, 1961.
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Section 10(23FE) offers tax exemption to income earned by certain notified entities such as sovereign wealth funds, pension funds, and similar long-term investors, provided the income is from investments in India’s infrastructure sector or other priority areas. This provision aims to attract long-term capital into the country, particularly in sectors that require patient and stable funding.
Key Amendments
The notification has substituted multiple timelines in the rules:
- All references to the financial year 2024-25 have now been changed to 2030-31.
- All references to the financial year 2025-26 have been changed to 2031-32.
- In the explanatory clauses, the year 2024 has been replaced with 2030.
This change effectively grants a six-year extension for eligible entities to invest in India and still enjoy the tax exemption benefits under Section 10(23FE). This extension provides much-needed long-term policy certainty for large global investors who are considering India as an investment destination.
By giving more time, the government is ensuring that sovereign wealth funds, pension funds, and other notified investors have confidence in committing capital to India’s infrastructure and critical sectors.
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