The Finance Ministry on Tuesday said that Abu Dhabi’s Sovereign Wealth Fund (SWF) — MIC Redwood 1 RSC Limited — has become the first foreign SWF that has been notified. It will get 100 per cent income tax exemption for the long-term investments to be made in the specified priority sectors in India.
“This 100 per cent income-tax exemption facility was well received by the SWFs and Pension Funds across the globe and a large number of SWFs and Pension Funds have shown interest in making investment in India’s infrastructure sector,” a Finance Ministry statement said.
The notification is a follow-up to the Bdget announcement this year when the Government granted tax exemption to incentivise long-term investment by the SWFs of the foreign governments in the priority sectors. On July 6, the Government had issued a notification to broaden the scope of this exemption and made all sub-sectors of Harmonised Master List of the infrastructure eligible for this income-tax exemption.
A senior Finance Ministry official said to expedite foreign investment in India’s priority areas during the pandemic time, the process of notification of the MIC Redwood 1 RSC Limited was completed in a record time. The fund made an application on September 18. Based on initial consultation and queries raised, it submitted its final replies on October 20. After that the process of notification, including consultation with the Law Ministry for legal vetting of the notification, etc., was completed in less than two weeks and accordingly notified on November 2.