Rule 283 — Computation of minimum investment and exempt income for purposes of Schedule V [Table: Sl. No. 7] to Act. Made under s.263, s.265 of the Income-tax Act, 2025.
Rule 283 gives effect to Section 263 and Section 265 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule computes the percentages and the exempt income referred to in Schedule V [Table: Sl. No. 7] of the Act, for a specified person investing in infrastructure through three vehicles.
Sub-rule (1) states the scope: the percentages in Notes 5(e), (f) and (g) of that Table entry, and the exempt income in clauses (e), (f) and (g) of column D, are calculated under this rule.
Sub-rules (2) to (4) give the three percentages. Under sub-rule (2), the Note 5(e) percentage is (A + B + C) × 100 ÷ D, where A is the eligible Alternative Investment Fund's aggregate eligible investments in eligible infrastructure entities or an eligible InvIT, B is its aggregate eligible investments in eligible domestic companies multiplied by those companies' own percentage under sub-rule (3), C is its aggregate eligible investments in eligible Non-Banking Financial Companies multiplied by their percentage under sub-rule (4), and D is its aggregate eligible investments — each taken from the balance sheet as on the last date of every financial year from 2021-2022 to the year immediately preceding the relevant tax year. Under sub-rule (3), the Note 5(f) percentage for an eligible domestic company is E × 100 ÷ F, E being its aggregate eligible investments in eligible infrastructure entities and F its aggregate eligible investments over the same span. Under sub-rule (4), the Note 5(g) percentage for an eligible Non-Banking Financial Company is G × 100 ÷ H, G being its aggregate eligible lending to eligible infrastructure entities and H its aggregate eligible lending. In each of the three, where the relevant tax year is the year of the first investment or the first loan, the amounts are taken from that year's balance sheet as on its last date. In sub-rules (2) and (3) the amounts also include eligible investments which would have been included had the calculation been carried out any time within three months after the date of receipt of those investments.
Sub-rule (5) closes the calculation: for the relevant tax year 2031-2032 and subsequent years, the percentages are deemed satisfied if they were satisfied for the relevant tax year 2030-2031.
Sub-rules (6) to (8) compute exempt income. For column D(e), income accruing or arising or attributed to or received by a specified person who is a unit holder of an eligible Alternative Investment Fund is chargeable as if the fund's investment had been made directly by him, and the exempt income is I + J + K + L — income from the fund's eligible investments in eligible infrastructure entities, income from its investments in eligible domestic companies multiplied by N and divided by O, income from its investments in eligible Non-Banking Financial Companies multiplied by Q and divided by R, and income from its eligible investments in an eligible InvIT — the I and L components counting only investments made by the specified person on or after the date of his notification. For column D(f) the exempt income is M × N ÷ O, and for column D(g) it is P × Q ÷ R, with N, O, Q and R taken from the balance sheet as on the last date of the tax year immediately preceding the relevant tax year, or of the relevant tax year itself where the eligible investment or lending was made in that year for the first time.
Sub-rules (9) to (11) impose the reporting. Every eligible Alternative Investment Fund, eligible domestic company and eligible Non-Banking Financial Company that has received funds from any specified person, directly or through an eligible Alternative Investment Fund, must furnish details of those funds in Form No. 177 for each tax year during which the funds or any part remain invested; the Form is furnished electronically under a digital signature or through an electronic verification code and verified by the person authorised to verify the entity's return under section 265; and it is furnished on or before the due date referred to in section 263(1)(c) for the tax year in which the eligible investments were first received from the specified person and for all subsequent tax years until the investment is returned.
Sub-rule (12) defines the terms. The classes of person take their meanings from Schedule V [Table: Sl. No. 7. Note 5]. "Balance sheet" is the balance-sheet including notes, drawn up as on 31st March of the relevant tax year, giving a true and fair view, complying with applicable accounting standards, and audited under regulation 20(5) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 for a fund or under section 139 of the Companies Act, 2013 for a domestic company. "Eligible investment" is an investment made by an eligible Alternative Investment Fund on or after 1st April, 2020 but on or before 31st March, 2030, or by an eligible domestic company on or after 1st April, 2021 but on or before 31st March, 2030. "Eligible lending" is lending by an eligible Non-Banking Financial Company on or after 1st April, 2020 but on or before 31st March, 2030. "Investment" means movable and immovable assets, including current and non-current investments, loans and advances and cash and cash equivalents. "Relevant tax year" is the year for which the exempt income is to be calculated, and also the tax year 2030-2031 for the purposes of sub-rule (5).
Schedule V [Table: Sl. No. 7] exempts a notified investor's income from infrastructure investment, but the money often reaches infrastructure indirectly — through a fund, through a holding company, or as a loan from a non-banking financial company. Without a method, there would be no way to say how much of a fund's income is infrastructure income. The rule builds a chain of percentages: the operating vehicle's own infrastructure ratio feeds into the fund's ratio, and the same ratios then carve the exempt slice out of the specified person's income. The cumulative measurement from financial year 2021-2022 stops a vehicle satisfying the test in one year and drifting out of it in the next.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Percentage for an eligible Alternative Investment Fund | (A + B + C) × 100 ÷ D | Amounts taken from the balance sheet as on the last date of each financial year from 2021-2022 to the year immediately preceding the relevant tax year | Sub-rule (2)(a), for Schedule V [Table: Sl. No. 7. Note 5(e)] |
| Percentage for an eligible domestic company | E × 100 ÷ F | Aggregate eligible investments in eligible infrastructure entities over aggregate eligible investments, on the same span of balance sheets | Sub-rule (3)(a), for Schedule V [Table: Sl. No. 7. Note 5(f)] |
| Percentage for an eligible Non-Banking Financial Company | G × 100 ÷ H | Aggregate eligible lending to eligible infrastructure entities over aggregate eligible lending, on the same span of balance sheets | Sub-rule (4)(a), for Schedule V [Table: Sl. No. 7. Note 5(g)] |
| Grace window for investments received close to the calculation date | Three months after the date of receipt of the eligible investments | Investments that would have been included had the calculation been carried out within that window are included in A, B and C, and in E | Sub-rules (2)(c) and (3)(c) |
| Deemed satisfaction of the percentages for later years | Relevant tax year 2031-2032 and subsequent years | Deemed satisfied if the percentage is satisfied for the relevant tax year 2030-2031 | Sub-rule (5) |
| Exempt income of a unit holder of an eligible Alternative Investment Fund | I + J + K + L | J is multiplied by N and divided by O, and K by Q and divided by R, using the values in sub-rules (7) and (8) | Sub-rule (6)(b) |
| Exempt income from an eligible domestic company and from an eligible Non-Banking Financial Company | M × N ÷ O and P × Q ÷ R respectively | N, O, Q and R taken as on the last date of the preceding tax year, or of the relevant tax year where the investment or lending was first made in that year | Sub-rules (7) and (8) |
| Window for an eligible investment | On or after 1st April, 2020 and on or before 31st March, 2030 for a fund; on or after 1st April, 2021 and on or before 31st March, 2030 for a domestic company | Definition of "eligible investment" | Sub-rule (12)(c) |
| Window for eligible lending | On or after 1st April, 2020 and on or before 31st March, 2030 | Lending made by an eligible Non-Banking Financial Company | Sub-rule (12)(d) |
| Time limit for furnishing Form No. 177 | On or before the due date referred to in section 263(1)(c) | For the tax year in which eligible investments were first received from the specified person and all subsequent tax years until the investment is returned | Sub-rule (11) |
The percentages are cumulative, not annual. Every one of A to H is an aggregate across balance sheets from financial year 2021-2022 up to the year before the relevant tax year, so a single year of heavy non-infrastructure investment does not by itself break the ratio, and equally a good year cannot repair a long record of dilution. The chain matters: B and C in the fund's formula are not the raw investments in domestic companies and non-banking financial companies but those investments scaled down by those entities' own percentages under sub-rules (3) and (4), so the fund inherits the shortfall of what it invests in. Sub-rule (5) is a hard stop that rewards the vehicle that gets to 2030-2031 in compliance — the percentages for 2031-2032 and later are deemed satisfied — and it works with the definitions in sub-rule (12), which close the eligible investment and eligible lending windows on 31st March, 2030. The three-month look-forward in sub-rules (2)(c) and (3)(c) exists because money received near a balance sheet date has not yet been deployed; it applies to the fund and the domestic company and is not repeated for the non-banking financial company in sub-rule (4). The reporting obligation in sub-rules (9) to (11) sits on the vehicles, not on the specified person, and it runs every year until the money is returned, not only in the year it was received.
An eligible Alternative Investment Fund has, on the cumulative balance sheet basis, Rs 500 crore of eligible investments in all, of which Rs 300 crore is directly in eligible infrastructure entities and Rs 200 crore is in an eligible domestic company whose own percentage under sub-rule (3) is 80%. A is Rs 300 crore and B is Rs 160 crore, so the sub-rule (2) percentage is (300 + 160) × 100 ÷ 500, that is 92%. A specified person holding units in that fund computes his exempt income under sub-rule (6) as I + J + K + L, with the income routed through the domestic company scaled by N ÷ O. The fund and the company each furnish Form No. 177 by the section 263(1)(c) due date for every year the specified person's money remains invested.
A fund, holding company or non-banking financial company that has taken money from a notified sovereign or pension investor meets it in the annual Form No. 177 filing and in the balance sheet workings behind the percentage; the specified person meets it in computing the exempt slice of the income it receives.
the percentages referred therein for the relevant tax year 2031-2032 and for subsequent relevant tax years shall be deemed to have been satisfied if the same is satisfied for the relevant tax year 2030-2031
the amounts A, B and C 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 eligible Alternative Investment Fund
"investment" means movable and immovable assets, including current and non-current investments, loans and advances and cash and cash equivalents