CENTRAL BOARD OF DIRECT TAXES NOTIFICATION NO 67-2020 DATED 17 AUGUST 2020

CENTRAL BOARD OF DIRECT TAXES NOTIFICATION NO. 67/2020 DATED AUGUST 17,2020

Subject:

 Additional conditions for exemption for pension funds notified

Explanation: Section 10(23FE) provides for an exemption to specified income like capital gains, interest, and dividend, arising from investments made by Sovereign Wealth Funds and Pension Funds in specified infrastructure activities. CBDT has prescribed additional conditions to be satisfied by the pension fund for availing the exemption.

• It is established under the laws of a foreign country, including the law of the province, state or local body.
• It is accountable for administering or investing assets for meeting the statutory obligations and the defined contributions of one or more funds established for providing retirement, employment, social security or any similar compensation to the participants or beneficiaries of such funds or schemes. 
• The earnings and assets of the pension fund are used only for meeting statutory obligations.
• It does not undertake any commercial activity whether within or outside India.
• Quarterly statement (Form No. 10BBB) should be filed providing the details in respect of each investment made by it in India.

The ITR shall be furnished along with a certificate in Form 10BBC.

Conclusion: To avail the exemption for pension funds under Section 10(23FE), the Central Board of Direct Taxes (CBDT) has prescribed additional conditions. These conditions include being established under foreign laws, administering assets for retirement funds, using earnings for statutory obligations, refraining from commercial activities, filing quarterly statements, and submitting the Income Tax Return with a certificate in Form 10BBC. Compliance with these conditions ensures eligibility for the specified income exemption for pension funds.

Ensure compliance with the additional conditions for exemption for pension funds. Contact us at info@manishanilgupta.com for assistance in filing Form No. 10BBB and obtaining the necessary certificate (Form 10BBC).

Disclaimer:The information given in this article is for general guidance to the readers. This information should not be sought as a substitute for legal opinion.