Income-tax (Twenty-Fifth Amendment) Rules, 2025
CBDT Extends Investment Deadline for Sovereign and Pension Funds under Section 10(23FE)
The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Twenty-Fifth Amendment) Rules, 2025 through G.S.R. 598(E) dated September 2025. This amendment brings significant relief to sovereign wealth funds, pension funds, and other specified entities investing in India.
What has changed?
Rule 2DCA of the Income-tax Rules, 1962 has been amended to extend the timelines for making eligible investments. Earlier, such investments were allowed up to financial year 2024-25 (assessment year 2025-26). With the latest amendment, the period has now been extended by six years, i.e., up to financial year 2030-31 (assessment year 2031-32).
Why is this important?
Section 10(23FE) of the Income-tax Act, 1961 provides tax exemption on income earned by specified funds, provided they invest in eligible infrastructure businesses or notified categories in India. By extending the investment window till 2030-31, the government is:
- Encouraging long-term foreign investments in Indian infrastructure.
- Providing more flexibility to global pension and sovereign funds.
- Supporting India’s infrastructure development goals.
Key Highlights of the Amendment
- Deadline extension: From FY 2024-25 to FY 2030-31.
- Assessment year impact: From AY 2025-26 to AY 2031-32.
- Other clauses updated: References to the year “2024” are now substituted with “2030” in multiple provisos and explanations under Rule 2DCA.
Conclusion
This extension is a welcome move for long-term global investors. It gives sovereign wealth funds and pension funds more time to channel capital into India’s infrastructure sector while continuing to enjoy tax benefits under section 10(23FE). For India, it strengthens the flow of stable, patient capital into sectors critical for economic growth.
Also Read:
- Recommendations of the 55th Meeting of the GST Council
- Changes in GST and Income Tax during the Financial Year 2024-25
- TDS and TCS provisions applicable from April 1, 2025
- Rationalizing TDS: A Deep Dive into Budget 2025’s Proposals
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