¹2DCA. Computation of minimum investment and exempt income for the purposes of clause (23FE) of section 10 of the Act.— (1) For the purposes of clause (23FE) of section 10of the Act, the percentages referred to in item (c), item (d) and item (e) of sub-clause (iii) , and the exempt income referred to in the fourth, fifth and sixth proviso shall be calculated in accordance with this rule.

 

(2) The percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-

 

(A+C+D) * 100

           B

 

Where,-

 

A = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act or in an Infrastructure Investment Trust referred to in sub-clause (i) of clause (13A) of section 2 of the Act;

 

B = Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year;

 

C = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more domestic companies referred to in item (d) of sub-clause (iii) ofclause (23FE) of section 10 of the Act, multiplied by the percentage for those domestic company or companies determined in accordance with sub-rule (3); and

 

D = Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more nonbanking financial companies referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, multiplied by the percentage for those non-banking financial company or companies determined in accordance with sub-rule (4):

 

Provided that in the case of financial year 2021-22 being the relevant previous year, the amounts A, B, C and D shall be calculated using the aggregate of eligible investments, appearing in the balance sheet of the financial year 2021-22 as on the 31^st day of March 2022:

 

Provided further that in a case where the relevant previous year is the year in which the first investment is made by the Alternative Investment Fund, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant previous year as on the last date of that year:

 

Provided also that the amount A, C and D shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the Alternative Investment Fund:  

 

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.  

 

(3) The percentage referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-

                         E  * 100  

           F

Where,-

 

E = Aggregate of eligible investments, appearing in the balance sheet of the domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act; and

 

F= Aggregate of eligible investments appearing in the balance sheet of the domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year:

 

Provided that in the case of financial year 2021-22 being the relevant previous year, the above amounts shall be calculated using the aggregate of eligible investments, appearing in the balance sheet of the financial year 2021-22 as on 31^st March 2022:

 

Provided further that in a case where the relevant previous year is the year in which the first investment is made by the domestic company, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant previous year as on the last date of that year:

 

Provided also that the amount E shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the domestic company:

 

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.  

 

(4) The percentage referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-

 

      G * 100

      H

 

Where,-

 

G = Aggregate of eligible lending, appearing in the balance sheet of the non-banking financial company as on the last date of all the financial years starting from the financial year 2021-22 and ending with the financial year immediately preceding the relevant previous year, made to one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act; and

 

H= Aggregate of eligible lending appearing in the balance sheet of the non-banking financial company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year:

 

Provided that in the case of financial year 2021-22 being the relevant previous year, the above amounts shall be calculated using the aggregate of eligible lending appearing in the balance sheet of the financial year 2021-22 as on 31^st March 2022:

 

Provided further that in a case where the relevant previous year is the year in which the first debt or loan is extended by the non-banking financial company, the above amounts shall be calculated using the aggregate of eligible lending appearing in its balance sheet of the relevant previous year as on the last date of that year:

 

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.  

 

5. For the purposes of the fourth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the income accrued or arisen or attributed to, or received by, the specified person, who is a unit holder of an Alternative Investment Fund, out of investment made in that fund, shall be chargeable to income-tax in the same manner as if it were the income accrued or arisen or attributed to, or received by, such person had the investment made by such investment fund been made directly by him and the calculation of exempt income of the specified person arising from the investment in such fund during the relevant previous year shall be made in the following manner, namely:-

 

 I+J+K+L   

 

where.-

 

I= Income accrued or arisen or attributed or received during the relevant previous year from the eligible investments made by the Alternative Investment Fund in companies or enterprises or entities referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause, computed in accordance with the provisions of the Act;

 

J = Income accrued or arisen or attributed or received during the relevant previous year, computed in accordance with the provisions of the Act, from the investments made by the Alternative Investment Fund in one or more domestic companies, referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person  multiplied by N and divided by O, where N and O shall have the value assigned to them in sub-rule (6) for each of such domestic company;

 

K = Income accrued or arisen or attributed or received during the relevant previous year, computed in accordance with the provisions of the Act, from the investments made by the Alternative Investment Fund in one or more non-banking financial companies, referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person multiplied by Q and divided by R, where Q and R shall have the value assigned to them in sub-rule (7) for each such non-banking financial company; and

 

L = Income accrued or arisen or attributed or received during the relevant previous year from the eligible investments made by the Alternative Investment Fund in Infrastructure Investment Trusts referred to in sub-clause (i) of clause (13A) of section 2 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause, computed in accordance with the provisions of the Act.

 

6. For the purposes of fifth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the exempt income during the relevant previous year shall be calculated in the following manner, namely:-  

 

 M *  N   

          O    

           

Where,-

 

M = income accrued or arisen or attributed or received during the relevant previous year from the investment made by the specified person in one or more domestic companies referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, computed in accordance with the provisions of the Act;

 

N = Aggregate of eligible investments, appearing in the balance sheet of the domestic company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible investment has been made during the relevant previous year for the first time), made  by domestic company in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of investment made by the specified person on or after the date of notification of the specified person under the said clause; and

 

O = Aggregate of investments, appearing in the balance sheet of the domestic company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible investment has been made during the relevant previous year for the first time), out of any investment made by the specified person.

 

7. For the purposes of sixth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the exempt income during the relevant previous year shall be calculated in the following manner, namely:-

P * Q   

 R

 

Where,-

 

P = income accrued or arisen or attributed or received during the relevant previous year from the investment made by the specified person  in one or more non-banking financial companies referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, computed in accordance with the provisions of the Act;

 

Q = Aggregate of eligible lending appearing in the balance sheet of the non-banking financial company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible lending has been made during the relevant previous year for the first time) made by non-banking financial company to one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause; and

 

R = Aggregate of lending appearing in the balance sheet of the non-banking financial company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible lending has been made during the relevant previous year for the first time) out of any investment made by the specified person.

 

8. Every Alternative Investment Fund, domestic company and non-banking finance company, which has received funds from any specified person, either directly or through Alternative Investment Fund, shall furnish the details of funds received from specified persons in Form 10BBD for each previous year during which such funds or any part thereof remains invested in such Alternative Investment Fund, domestic company and non-banking finance company.

 

9. Form No 10BBD shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorized to verify the return of income of such Alternative Investment Fund, domestic company and non-banking finance company under section 140 of the Act.

 

10. Form No. 10BBD shall be furnished on or before the due date referred to in the Explanation 2 to subsection (1) of section 139 of the Act for the assessment year relevant to the previous year in which the eligible investments have been first received from the specified person and all subsequent previous years till the eligible investment received from the specified person is returned.

 

11. The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall -

 

1. specify the procedure, formats and standards for ensuring secure capture and transmission  of the data in Form No. 10BBD; and

 

2. specify the procedure, format, data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (9), for verification of the person furnishing the said Form; and  

 

(ii) be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the Form No 10BBD so furnished.

 

Explanation 1: For the purposes of this rule, the expressions -

 

1. "Alternative Investment Fund" means Category –I or Category –II Alternative Investment Fund referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act;

 

2.  "Balance Sheet" means the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on 31^st day of March of the relevant financial year which gives a true and fair view of the state of affairs , complies with applicable accounting standards and has been audited by the auditor of the relevant Alternative Investment Fund or respective companies, in accordance with the provisions of regulation sub-regulation (5) of regulation 20 of Securities and Exchange Board of India (Alternate Investment Fund) Regulations, 2012 or section 139 of the Companies Act 2013, as the case may be;  

 

3.  "domestic company" means a company referred to in item (d) of sub clause (iii) of clause (23FE) of section 10 of the Act;

 

4.  "eligible investment" means an investment which has been made by an Alternative Investment Fund or domestic company, as the case may be, on or after the 1^st day of April, 2020 but on or before the 31^st day of March, 2024;

 

5.  "eligible lending" means lending made by a non-banking financial company on or after the 1^st day of April, 2020 but on or before the 31^st day of March, 2024;

 

6. "investment" shall mean movable and immovable assets including current and non-current investments, loans and advances and cash and cash equivalents;

 

7.  "non-banking financial company" means a company referred to in item (e) of sub clause (iii) of clause (23FE) of section 10 of the Act;  

 

8.  "relevant previous year" means the previous year for which the income exempt under clause (23FE) of section 10 of the Act is to be calculated:

 

Provided that for the purposes of fourth proviso of sub-rule (2), fourth proviso of sub-rule (3) and third proviso of sub-rule (4), the previous year 2024-25 shall be considered to be relevant previous year even if exempt income under clause (23FE) of section 10 of the Act is not required to be calculated for that year; and  

 

9. "specified person" means a person referred to in Explanation 1 to clause (23FE) of section 10 of the Act.‘.  

 

 

 

Notes:

 

 1. Inserted by the Income-tax Amendment (Thirteenth Amendment) Rules, 2022 Notification no. 50/2022 dated 06.05.2022