The government has given great relief to Sovaren Wealth Funds and Pension Funds. The exemption on tax on investment made in India has been extended by the Central Government for five years i.e. till 31 March, 2030. This has been revealed by a media report. The Department of Revenue notified it today on Saturday. The announcement related to this was made in the Union Budget this year. Due to this tax exhalation, Sovereign Wealth Funds and Pension Funds get relief from tax on the income from dividend, interest and long -term capital gains by investing in India. The purpose of this relief is that foreign capital came here for a long time amid the increasing demand for infrastructure as well as telecom, energy, logistics including infrastructure in India.
The rule of tax exhalation was brought five years ago
The government introduced section 10 (23 FE) under the Income Tax Act in the year 2020 about five years ago. Under this, dividend, interest and long term capital gains on investment in special infra business under certain circumstances were excluded from the scope of tax. This discount rule is applicable to investment made after 1 April 2020. Its goal is to bring foreign investment on a large scale for a long time in the important infra projects of the country. Earlier this exemption was only till 31 March 2024 but then it was extended to 31 March 2025. It was announced by Finance Minister Nirmala Sitharaman in the interim union budget 2024-25.
What are Sovereign Wealth Fund and Pension Fund?
The Soveran Wealth Fund is an investment fund owned by the government. This money is usually raised through the reserves of a country, such as earnings from oil exports, trade surplus or other profits of the government. Some examples of Soverene Wealth Fund are Norwegled Pension Fund Global, Abu Dhabi Investment Authority (Adia) and GIC, Temacek Holdings. Now talking about pension funds, it is a retirement savings fund that collects money from workers and employees and invests it. It is used to give pension to retired people every month. Such as Canada Pension Investment Board.