Rule 24: Notification of infrastructure facilities
Rule 24 sets the conditions for a public facility to be eligible for notification as an infrastructure facility under section 32(e). Ownership, the government or statutory-body agreement, and the operating date must all be checked.
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Rule 24 - Notification of infrastructure facility for the purposes of section 32(e)
The following conditions shall be fulfilled by a public facility to be eligible to be notified as an infrastructure facility under section 32(e):— (a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central Act or State Act; (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for — (i) developing; or (ii) operating and maintaining or; (iii) developing, operating and maintaining a new infrastructure facility similar in nature to an infrastructure facility referred to in the Explanation to section 80-IA (4)(i) of the Income Tax Act, 1961 (43 of 1961), as it existed prior to its repeal; and (c) it has started or starts operating and maintaining such infrastructure facility on or after the 1st April, 1995.
Introduction
Satisfying the conditions is relevant to eligibility for notification. A private label such as infrastructure project is not itself the statutory notification or a conclusion that every borrowing cost is deductible.
Rule breakdown
Identify the eligible owner
The facility must be owned by a company registered in India, a consortium of such companies, or an authority, board, corporation or other body established or constituted under a Central or State Act.
Keep incorporation or establishing-law evidence with the project documents. The listed ownership condition should not be expanded to every person operating a commercial facility.
Review the agreement and counterparty
The owner must have entered an agreement with the Central Government, a State Government, a local authority or another statutory body.
The agreement must concern (i) developing; (ii) operating and maintaining; or (iii) developing, operating and maintaining the qualifying new facility. Check the actual contractual activity rather than relying only on the project name.
Apply the historical infrastructure comparison
The new facility must be similar in nature to an infrastructure facility referred to in the Explanation to section 80-IA(4)(i) of the 1961 Act as it existed before repeal.
This historical reference is part of the notified rule. Retain it when assessing the comparison; do not substitute an unrelated current section number simply because the underlying Act changed.
Check the operating commencement date
Clause (c) requires the facility to have started, or to start, operating and maintaining on or after 1 April 1995.
Record the relevant commencement evidence. The rule states this lower date boundary; it does not state that incorporation or signing the agreement alone is the operating commencement.
Build an eligibility file before claiming the outcome
Arrange the ownership evidence, executed agreement, facility comparison and commencement documents as separate checks. Then verify the actual notification and the section 32(e) requirements for the tax treatment being considered.
Hypothetical: an Indian company with a government agreement cannot conclude eligibility from those two facts alone. The nature of the new facility, operating date and notification position still need to be checked.
Key takeaways
Specified ownership
Use the ownership categories in clause (a).
Agreement and facility
Check the eligible counterparty, activity and historical facility comparison.
Eligibility is not notification
Verify the notification and section 32(e) context separately.
Practical checklist
- Retain ownership and executed agreement evidence.
- Document the historical facility comparison.
- Verify commencement and notification separately.
Avoid
- Do not treat a project label as statutory notification.
- Do not omit the nature and commencement conditions.
FAQs
Does an agreement with any private company satisfy clause (b)?
The specified counterparties are the Central Government, a State Government, a local authority or another statutory body.
What operating date does the rule require?
The facility must have started or start operating and maintaining on or after 1 April 1995.
Why does the rule refer to the repealed 1961 Act?
The notified text expressly uses the infrastructure-facility description in section 80-IA(4)(i) as it existed before repeal for its similarity test.
Glossary
- Eligible public facility
- A public facility satisfying the stated ownership, agreement and operating conditions for notification.
- Historical comparison
- The comparison to the specified 1961 Act infrastructure description before repeal.