Computation of minimum investment and exempt income for purposes of Schedule V [Table: Sl. No. 7] to Act

This is an overview of a long, formula-heavy rule; the bare Rules carry the full formulas.

Percentage tests (sub-rules 2 to 5). The percentage for Note 5(e) is (A + B + C) / D × 100 for an eligible Alternative Investment Fund, where A is its eligible investments in eligible infrastructure entities or an eligible InvIT, B is its eligible investments in eligible domestic companies multiplied by that company's percentage, C is its eligible investments in eligible NBFCs multiplied by that NBFC's percentage, and D is all its eligible investments — in each case as shown in the balance sheet on the last date of each financial year from 2021-22 up to the year before the relevant tax year (with a three-month look-forward). For an eligible domestic company (Note 5(f)) the percentage is E / F × 100, E being eligible investments in eligible infrastructure entities and F all eligible investments. For an eligible NBFC (Note 5(g)) it is G / H × 100, G being eligible lending to eligible infrastructure entities and H all eligible lending. For the relevant tax year 2031-32 and later years, the percentages are deemed satisfied if satisfied for 2030-31.

Exempt income (sub-rules 6 to 8). Income of a specified person who is a unit holder of an eligible Alternative Investment Fund is taxable as if the fund's investment had been made directly by that person, and the exempt income is I + J + K + L: income from the fund's eligible investments in eligible infrastructure entities and in an eligible InvIT out of the specified person's investment (I and L), and income from eligible domestic companies and NBFCs scaled by the ratio of the company's or NBFC's eligible infrastructure investment or lending to its total, out of the specified person's investment (J and K). Sub-rules (7) and (8) give the corresponding formulas, M × N / O and P × Q / R, for exempt income from investment by the specified person in eligible domestic companies and eligible NBFCs.

Reporting (sub-rules 9 to 11). Every eligible Alternative Investment Fund, eligible domestic company and eligible NBFC that has received funds from a specified person, directly or through a fund, furnishes the details in Form No. 177 for each tax year in which the funds remain invested, electronically under digital signature or electronic verification code, verified by the person authorised under section 265, by the section 263(1)(c) due date.

Definitions (sub-rule 12). Including the terms in Schedule V [Table: Sl. No. 7, Note 5]; a "balance sheet" as at 31 March that is true and fair, complies with accounting standards and is audited; "eligible investment" as one made by an eligible Alternative Investment Fund from 1 April 2020 to 31 March 2030, or by an eligible domestic company from 1 April 2021 to 31 March 2030; "eligible lending" by an eligible NBFC from 1 April 2020 to 31 March 2030; "investment"; and "relevant tax year".