Rule 282 — Notification of pension fund and other conditions to be satisfied by the pension fund. Made under s.263, s.515 of the Income-tax Act, 2025.
Rule 282 gives effect to Section 263 and Section 515 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) prescribes the further conditions a pension fund mentioned in Schedule V [Table: Sl. No. 7. Note 5(a)(iii)] must satisfy. It must be regulated under the law of a foreign country, including laws made by any of its political constituents, being a province, State or local body, under which it is created or established. It must 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 participants or beneficiaries. That responsibility condition is deemed satisfied for assets being administered or invested if their value is not more than 10% of the total value of the assets administered or invested by the fund, they are wholly owned directly or indirectly by the Government of a foreign country, and they vest in that Government upon dissolution.
Clause (d) requires the earnings and assets of the pension fund to be used only for meeting statutory obligations and defined contributions for participants or beneficiaries, with no portion of the earnings or assets inuring any benefit to any other private person. Clause (e) takes payments to creditors or depositors for loans taken or borrowings for purposes other than making investment in India outside that restriction, and clause (f) takes outside it earnings from the clause (c) assets where those earnings are credited to the account of the Government of that foreign country or to another account designated by it, so that no portion inures any benefit to any private person.
Clause (g) requires the fund to intimate the details of each investment made by it in India during a quarter, within one month from the end of the quarter, in Form No. 175. Clause (h) requires it to file its return of income on or before the due date specified under section 263(1)(c) and to furnish with the return a compliance certificate in Form No. 176 from an accountant as defined in section 515(3)(b). Clause (i) gives "loans and borrowings" the meaning assigned in Schedule V [Table: Sl. No. 7. Note 5(c)].
Sub-rule (2) prescribes the application: for notification under Schedule V [Table: Sl. No. 7. Note 5(a)(iii)(D)], the pension fund applies in Form No. 174, enclosing the relevant documents and evidence, to the Member, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, New Delhi, having supervision and control over the work of the Foreign Tax and Tax Research Division.
The exemption in Schedule V for a foreign pension fund rests on the fund being a genuine retirement or social security vehicle rather than a private investment pool using a pension label. Note 5(a)(iii) leaves the further conditions and the notification route to be prescribed. Rule 282 prescribes them along two lines: what the fund must be — regulated abroad, responsible for administering pension assets, with earnings and assets locked to participants and beneficiaries — and what it must do while it holds Indian investments, namely report each investment quarterly and file a return with an accountant's compliance certificate. Sub-rule (2) names the single office at the Board to which the application goes.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Value of assets covered by the deeming provision on the responsibility condition | Not more than 10% of the total value of the assets administered or invested by the fund | Applies only where those assets are also wholly owned directly or indirectly by the Government of a foreign country and vest in that Government upon dissolution | Rule 282(1)(c)(i) |
| Time to intimate each investment made in India | Within one month from the end of the quarter | For each investment made during that quarter; intimated in Form No. 175 | Rule 282(1)(g) |
| Due date for the return of income | On or before the due date specified under section 263(1)(c) | The compliance certificate in Form No. 176 must be furnished along with that return | Rule 282(1)(h) |
The 10% figure in clause (c) is not a general tolerance for non-pension assets. It only deems the clause (b) responsibility condition satisfied, and only where all three of its requirements hold together — value not more than 10%, wholly owned directly or indirectly by the Government of a foreign country, and vesting in that Government on dissolution. The private benefit prohibition in clause (d) is the heart of the conditions, and clauses (e) and (f) are its two stated carve-outs: payments to creditors or depositors for borrowings other than for making investment in India, and earnings from the clause (c) assets credited to the foreign Government's account or an account it designates. Two continuing obligations run alongside the fund's Indian investments and are easy to miss because they are not annual: the Form No. 175 intimation is per quarter and covers each investment made in that quarter, and the Form No. 176 certificate must go with the return, which itself must be filed by the section 263(1)(c) due date. The notification application in sub-rule (2) goes to a named office of the Board, not to a jurisdictional officer.
A foreign pension fund regulated under the law of a province of another country holds Indian investments and is notified under Schedule V. It makes three investments in India during a quarter. All three must be intimated in Form No. 175 within one month from the end of that quarter. At year end it files its return by the section 263(1)(c) due date with the accountant's compliance certificate in Form No. 176. If part of its earnings were applied for the benefit of a private person other than as clause (e) or clause (f) permits, clause (d) would not be satisfied.
The fund meets it as the Form No. 174 application to the Board, the quarterly Form No. 175 intimations and the Form No. 176 certificate with its return; an Indian investee company meets it only indirectly, through the notification the fund relies on.
value of such assets is not more than 10% of the total value of the assets administered or invested by such fund
it 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. 175