Procedure for setting up an Infrastructure Debt Fund for purpose of exemption under Schedule VII [Table: Sl. No. 46] to Act

Conditions (sub-rules 1 to 7).

• The fund is set up as a Non-Banking Financial Company meeting the Reserve Bank of India's regulatory framework.
• It invests only in post-commencement-operation-date infrastructure projects that have completed at least one year of satisfactory commercial operations, or in toll-operate-transfer projects as direct lender.
• It raises funds by rupee-denominated or foreign currency bonds (in accordance with RBI directions and the relevant FEMA regulations, with an original maturity of at least five years at a non-resident investor's first investment), zero coupon bonds (in accordance with rule 7), or external commercial borrowings (under RBI directions, with a tenor of at least five years and not sourced from foreign branches of Indian banks).
• Investment in an individual project, or a project of a group, at any time does not exceed 20% of the fund's corpus.
• It makes no investment in a project where its specified shareholder, associated enterprise, or the specified shareholder's group has a substantial interest.
• It files its return under section 263(1)(a) by the section 263(1)(c) due date.
• If it fails any condition or RBI direction, the Act applies as if it were not an Infrastructure Debt Fund under the Schedule.

Definitions (sub-rule 8). Including: "corpus" (total funds raised for investment); "substantial interest" (beneficial ownership of shares carrying at least 10% of the voting power of a company, or, in a concern other than a company, beneficial entitlement at any time in the year to at least 20% of its income); "relative" (spouse, siblings, spouse's siblings, parents' siblings, lineal ascendants and descendants of the individual or spouse, spouses of those, and lineal descendants of siblings); and "specified shareholder" (an NBFC, a bank or any other person holding, directly or indirectly, shares carrying at least 30% of the voting power in the fund).