The Central Board of Direct Taxes (CBDT) has notified Inbar Holding RSC Limited, an Abu Dhabi-based pension fund, as a specified person eligible for income tax exemption under Section 10(23FE) of the Income-tax Act, 1961. The exemption will apply to eligible investments made in India up to March 31, 2030, subject to strict compliance conditions.
The notification, issued by the Ministry of Finance (Department of Revenue), grants tax exemption to income arising from investments made by the pension fund in India on or after the date of publication of the notification in the Official Gazette.
Section 10(23FE) was introduced to encourage sovereign wealth funds and pension funds to invest in India’s infrastructure and strategic sectors by offering exemptions on income such as dividends, interest, and long-term capital gains, provided certain conditions are fulfilled.
Inbar Holding RSC Limited (PAN: AAGCI2029C) has now been formally recognised as a qualifying pension fund for this purpose.
Key Conditions Imposed by CBDT
The notification lays down a comprehensive compliance framework that the pension fund must adhere to in order to retain the tax exemption:
- Timely filing of returns:
The assessee must file income-tax returns under Section 139(1) for all relevant years during which the investment remains active. - Quarterly investment disclosures:
Details of each investment made in India must be reported quarterly in Form 10BBB within one month from the end of the quarter. - Compliance certification:
A certificate in Form 10BBC, issued by a qualified accountant under Section 288, confirming compliance with Section 10(23FE), must be filed along with the return. - Segregated accounting:
The fund must maintain separate, segmented accounts of income and expenditure relating only to the exempt investments. - Regulatory oversight:
The fund must continue to be regulated under the laws of the Government of Abu Dhabi or the United Arab Emirates. - Purpose-linked asset use:
Earnings and assets must be used exclusively to meet statutory obligations and defined benefits such as retirement, social security, disability, or death benefits, without any private inurement. - No borrowing for Indian investments:
The fund is prohibited from using any direct or indirect loans or borrowings for making investments in India. - No day-to-day operational control:
While the fund may monitor investments and appoint directors to protect its interests, it cannot participate in the daily operations of the investee entities.
Violation of any of these conditions will render the fund ineligible for tax exemption, as explicitly stated in the notification.
Notification Details
Notification No. 1/2026
Date: 05/12/2025
