New Delhi, Nov 3: Abu Dhabi’s Sovereign Wealth Fund – MIC Redwood 1 RSC – has been granted 100 per cent income tax exemption for investments to be made in specified infrastructure sectors, the Finance Ministry said on Tuesday.
With this, the income from interest, dividend and long-term capital gains for the SWF’s investment in India’s priority sectors has been exempted, the ministry said in a statement.
“Abu Dhabi’s Sovereign Wealth Fund (SWF) – MIC Redwood 1 RSC Limited – has become the first foreign SWF that has been notified and granted 100 per cent income-tax exemption for the long-term investments to be made in the specified priority sectors in India,” it said.
India has gradually opened up the economy for FDI, except very few sectors and has also extended a lot of tax concessions for sovereign funds to attract long-term investments in the infrastructure sectors.
A tax official said that to expedite foreign investment in India’s priority areas during the COVID-19 pandemic times, the process of notification of MIC Redwood 1 RSC was completed in a record time.
On September 18, MIC Redwood 1 RSC filed application seeking tax exemption and the notification granting 100 per cent tax exemption was issued on November 2.
To incentivise long-term investment by SWFs in the priority sectors, the government through the Finance Act, 2020, had granted a 100 per cent income tax exemption to income of a notified SWF in respect of its investment made in the specified infrastructure sectors.
The income tax exemption to SWFs and the Pension Fund is expected to provide foreign funding to infrastructure sectors. (PTI)
Follow our WhatsApp channel
