Guidelines for Setting up an Infrastructure Debt Fund For The Purpose Of Exemption, Notification Issued on 30-4-2012

In exercise of the powers conferred by clause (47) of section 10 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (5th Amendment) Rules, 2012.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, after rule 2E, the following rule shall be inserted, namely:-

Guidelines for setting up an Infrastructure Debt Fund for the purpose of exemption under clause (47) of section 10.

2F. (1) The Infrastructure Debt Fund shall be set up as a Non-Banking Financial Company conforming to and satisfying the conditions provided by the Reserve Bank of India in the Infrastructure Development Fund – Non-Banking Financial Companies (Reserve Bank) Directions, 2011, vide Notification No. DNBS.233/CGM(US)-2011, dated 21st November, 2011.

(2) The funds of Infrastructure Debt Fund shall be invested only in the Public Private Partnership Infrastructure Projects and Post Commencement Operation Date Infrastructure Projects which have completed at least one year of satisfactory commercial operation and such Infrastructure Debt Fund is a party to tripartite agreement with the concessionaire and the project authority for ensuring compulsory buy out and termination payment.

(3) The Infrastructure Debt Fund shall issue rupee denominated bonds or foreign currency bonds in accordance with the directions of Reserve Bank of India (RBI) and the relevant regulations under the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000, as amended from time to time.

(4) The terms and conditions of any bond issued by the Infrastructure Debt Fund shall be in accordance with the said directions of the Reserve Bank of India and the regulations referred to in sub-rule (3).

(5) In case of an investor in the aforesaid bond being a non-resident, the original or initial maturity of bond, at time of first investment by such non-resident investor, shall not be less than a period of five years :

Provided that the investment made by a non-resident investor in such bonds shall be subject to a lock-in period of not less than three years, but the non-resident investor may transfer the bond to another non-resident investor within such lock-in period.

(6) The investment made by the Infrastructure Debt Fund in an individual project or project belonging to a group at any time, shall not exceed twenty per cent, of the corpus of the fund.

(7) No investment shall be made by the Infrastructure Debt Fund in any project where its sponsor or the associate enterprise or the group of such sponsor has a substantial interest.

(8) The Infrastructure Debt Fund shall file its return of income as required by sub-section (4C) of section 139 on or before the due date.

(9) In case the Infrastructure Debt Fund does not fulfil any of the conditions provided in this rule or directions of the Reserve Bank of India, all provisions of the Act shall apply as if it is not an Infrastructure Debt Fund referred to in clause (47) of section 10 of the Act.

Explanation. – For the purpose of this rule,-

 (i)  “associate enterprise” shall have the same meaning as assigned to it in section 92A of the Act;

 (ii)  “concern” shall have the same meaning as in clause (a) of Explanation
3 of sub-section (22) of section 2 of the Act;

(iii)  “concessionaire”, “tripartite agreement” and “project authority” respectively shall have the same meaning as assigned to them in the Infrastructure Debt Fund-Non-Banking Financial Company (Reserve Bank) Directions, 2011;

(iv)  “corpus” means the total funds of the Infrastructure Debt Fund raised for the purpose of investment;

(v)  “group” means a group as defined in clause (mm) of section 2 of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

(vi)  a person shall be deemed to have substantial interest in –

(a)  a company if he is the beneficial owner (including beneficial ownership held by one or more of his relatives, in case the person is an individual) of shares (not being the shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than 10 per cent of the voting power; or

(b)  a concern other than a company if he is, at any time during the previous year, beneficially entitled to not less than 20 per cent of the income of such concern.

(vii)  “relative”, in relation to an individual, means—

(a)  spouse of the individual;

(b)  brother or sister of the individual;

(c)  brother or sister of the spouse of the individual;

(d)  brother or sister of either of the parents of the individual;

(e)  any lineal ascendant or descendant of the individual;

(f)  any lineal ascendant or descendant of the spouse of the individual;

(g)  spouse of the persons referred to in sub-clauses (b) to (f); or

(h)  any lineal descendant of a brother or sister of either the individual or of the spouse of the individual.

(viii)  “sponsor” means a non-banking financial company, or a bank which is allowed to act as sponsor of Infrastructure Debt Fund in accordance with the directions of Reserve Bank of India.’


Reference: Section 295 of the income Tax Act, 1961

Power to make rules

(1) The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters :—

(a)  the ascertainment and determination of any class of income;

(b)  the manner in which and the procedure by which the income shall be arrived at in the case of—

 (i)  income derived in part from agriculture and in part from business;

(ii)  persons residing outside India;

[(iii) an individual who is liable to be assessed under the provisions of sub-section (2) of section 64;

(c)  the determination of the value of any perquisite chargeable to tax under this Act in such manner and on such basis as appears to the Board to be proper and reasonable;

(d)  the percentage on the written down value which may be allowed as depreciation in respect of buildings, machinery, plant or furniture;

(dd) the extent to which, and the conditions subject to which, any expenditure referred to in sub-section (3) of section 37 may be allowed;

(dda) the matters specified in sub-sections (2) and (3) of section 44AA;


(ee) the conditions or limitations subject to which any payment of rent made by an assessee shall be deducted under section 80GG;

(eea) the cases, the nature and value of assets, the limits and heads of expenditure and the outgoings, which are required to be prescribed under sub-section (6) of section 139;

(eeb) the time within which any person may apply for the allotment of a permanent account number, the form and the manner in which such application may be made and the particulars which such application shall contain and the transactions with respect to which permanent account numbers shall be quoted on documents relating to such transactions under section 139A;

(eeba) the documents, statements, receipts, certificates or audited reports which may not be furnished along with the return but shall be produced before the Assessing Officer on demand under section 139C;

(eebb) the class or classes of persons who shall be required to furnish the return of income in electronic form; the form and the manner of furnishing the said return in electronic form; documents, statements, receipts, certificates or reports which shall not be furnished with the return in electronic form and the computer resource or electronic record to which such return may be transmitted under section 139D;

(eec) the form of the report of audit and the particulars which such report shall contain under sub-section (2A) of section 142;

(f)  the manner in which and the period to which any such income as is referred to in section 180 may be allocated;

(fa) the form and manner in which the information relating to payment of any sum may be furnished under sub-section (6) of section 195;

(g)  the authority to be prescribed for any of the purposes of this Act;

(h)  the procedure for giving effect to the terms of any agreement for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by the Central Government under this Act;

(i)  the form and manner in which any application, claim, return or information may be made or furnished and the fees that may be levied in respect of any application or claim;

(j)  the manner in which any document required to be filed under this Act may be verified;

(k) the procedure to be followed on applications for refunds;

(kk) the procedure to be followed in calculating interest payable by assessees or interest payable by Government to assessees under any provision of this Act, including the rounding off of the period for which such interest is to be calculated in cases where such period includes a fraction of a month, and specifying the circumstances in which and the extent to which petty amounts of interest payable by assessees may be ignored;]

(l)  the regulation of any matter for which provision is made in section 230;

(m) the form and manner in which any appeal or cross-objection may be filed under this Act, the fee payable in respect thereof and the manner in which intimation of any such order as is referred to in clause (c) of sub-section (2) of section 249 may be served;

(mm) the circumstances in which, the conditions subject to which and the manner in which, the Commissioner (Appeals) may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the Assessing] Officer;

(mma) the form in which the statement under section 285B shall be delivered to the Assessing Officer;

(n)  the maintenance of a register of persons other than legal practitioners or accountants as defined in sub-section (2) of section 288 practising before income-tax authorities and for the constitution of and the procedure to be followed by the authority referred to in sub-section (5) of that section;

(o)  the issue of certificate verifying the payment of tax by assessees;

(p)  any other matter which by this Act is to be, or may be, prescribed.

(3) In cases coming under clause (b) of sub-section (2), where the income liable to tax cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which in the opinion of the Board is unreasonable, the rules made under this section may—

(a)  prescribe methods by which an estimate of such income may be made; and

(b)  in cases coming under sub-clause (i) of clause (b) of sub-section (2) specify the proportion of the income which shall be deemed to be income liable to tax,

and an assessment based on such estimate or proportion shall be deemed to be duly made in accordance with the provisions of this Act.

(4) The power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and, unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees.


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