CBDT inserts rule 2DCA for computation of minimum investment and exempt income under Section 10 (23FE)

Last updated: 10 May 2022

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The Central Board of Direct Taxes (CBDT) has introduced Rule 2DCA to the Income-tax Rules, 1962. This new rule provides specific guidelines for calculating the minimum investment and exempt income for Alternative Investment Funds (AIFs) under Section 10 (23FE) of the Income-tax Act. It details how eligible investments in companies, infrastructure investment trusts, and non-banking financial companies are to be computed, with special provisions for the initial financial years.

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 6th May, 2022 G.S.R. 341(E).In exercise of the powers conferred by the Explanation 3 to clause (23FE) of section 10 and fourth, fifth and sixth provisos to clause (23FE) of section 10, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely :─ 1. Short tit

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FAQ :

Rule 2DCA has been inserted to provide a method for calculating the minimum investment and exempt income for Alternative Investment Funds (AIFs) as per Section 10 (23FE) of the Income-tax Act.

The rules, cited as the Income-tax Amendment (Thirteenth Amendment) Rules, 2022, came into force from the date of their publication in the Official Gazette.

The rule outlines a formula involving aggregate eligible investments made by the AIF in specified companies, infrastructure investment trusts, and non-banking financial companies, considering balance sheet data from the financial year 2021-22 onwards.

Yes, if the relevant previous year is the year in which the first investment is made by the AIF, the amounts are calculated using the aggregate of eligible investments appearing in its balance sheet as of the last date of that year.

For the financial year 2025-26 and subsequent years, the percentage requirement for certain investments will be considered satisfied if it was met for the financial year 2024-25.

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