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Rule 283Published

Rule 283: Minimum investment percentages and exempt income for Schedule V [Table: Sl. No. 7]

Rule 283 sets out how to calculate the figures that Schedule V [Table: Sl. No. 7] to the Act needs. These are the percentages in Notes 5(e), (f) and (g) of that Table and the exempt income in clauses (e), (f) and (g) of its column D. There are separate formulas for an eligible Alternative Investment Fund, an eligible domestic company and an eligible Non-Banking Financial Company. The rule then explains how a specified person works out its exempt income from each of them, requires these entities to report funds received from specified persons in Form No. 177, and defines the terms used.

Official notified Income-tax Rules, 2026

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Bare law

Rule 283 - Computation of minimum investment and exempt income for purposes of Schedule V [Table: Sl. No. 7] to Act

(1) For the purposes of Schedule V [Table: Sl. No. 7] to the Act, the percentages referred to in Notes 5(e), (f) and (g) of the said Table, and the exempt income referred to in clauses (e), (f) and (g) of column D thereof shall be calculated in accordance with this rule.

(2) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(e)] to the Act shall be calculated in the following manner: —

(A+B+C) / D × 100 [The Gazette prints this as a fraction: (A+B+C) is the numerator and D is the denominator printed beneath it, and the fraction is multiplied by 100. The "/" is added here only to show that layout on one line.]

Where, —

A = aggregate of eligible investments, appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible infrastructure entity or in an eligible InvIT;

B = aggregate of eligible investments, appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible domestic companies, multiplied by the percentage for those domestic company or companies determined in accordance with sub-rule (3);

C = aggregate of eligible investments appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible Non-Banking Financial Companies, multiplied by the percentage for those non-banking financial company or companies determined in accordance with sub-rule (4); and

D = aggregate of eligible investments appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year;

(b) in a case, where the relevant tax year is the year in which the first investment is made by the eligible Alternative Investment Fund, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant tax year as on the last date of that year; and

(c) for the purposes of this sub-rule, the amounts A, B and C shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the eligible Alternative Investment Fund.

(3) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(f)] to the Act shall be calculated in the following manner:—

E / F × 100 [The Gazette prints this as a fraction: E is the numerator and F is the denominator printed beneath it, and the fraction is multiplied by 100. The "/" is added here only to show that layout on one line.]

Where, —

E = aggregate of eligible investments, appearing in the balance sheet of the eligible domestic company as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible infrastructure entity; and

F = aggregate of eligible investments appearing in the balance sheet of the eligible domestic company as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year;

(b) in a case, where the relevant tax year is the year in which the first investment is made by the eligible domestic company, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant tax year as on the last date of that year; and

(c) for the purposes of this sub-rule, the amount E shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the eligible domestic company.

(4) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(g)] to the Act shall be calculated in the following manner: —

G / H × 100 [The Gazette prints this as a fraction: G is the numerator and H is the denominator printed beneath it, and the fraction is multiplied by 100. The "/" is added here only to show that layout on one line.]

Where, —

G = aggregate of eligible lending, appearing in the balance sheet of the eligible Non-Banking Financial Company as on the last date of all the financial years starting from the financial year 2021-2022 and ending with the financial year immediately preceding the relevant tax year, made to one or more eligible infrastructure entity; and

H = aggregate of eligible lending appearing in the balance sheet of the eligible Non-Banking Financial Company as on the last date of all the financial years starting from the financial year 2021-2022 and ending on the financial year immediately preceding the relevant tax year;

(b) in a case, where the relevant tax year is the year in which the first debt or loan is extended by the eligible Non-Banking Financial Company, the above amounts shall be calculated using the aggregate of eligible lending appearing in its balance sheet of the relevant tax year as on the last date of that year.

(5) For the purposes of sub-rules (2), (3) and (4), the percentages referred therein for the relevant tax year 2031-2032 and for subsequent relevant tax years shall be deemed to have been satisfied if the same is satisfied for the relevant tax year 2030-2031.

(6) For the purposes of exempt income referred to in Schedule V [Table: Sl. No. 7.D(e)] to the Act, —

(a) the income accrued or arisen or attributed to, or received by the specified person, who is a unit holder of an eligible Alternative Investment Fund, out of investment made in that fund, shall be chargeable to income-tax in the same manner as if it were the income accrued or arisen or attributed to, or received by, such person had the investment made by such investment fund been made directly by him;

(b) the calculation of exempt income of the specified person arising from the investment in such fund during the relevant tax year shall be made in the following manner:—

I+J+K+L

Where, —

I = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the eligible investments made by the eligible Alternative Investment Fund in eligible infrastructure entity, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause;

J = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investments made by the eligible Alternative Investment Fund in one or more eligible domestic companies, out of any investment made by the specified person multiplied by N and divided by O, where N and O shall have the value assigned to them in sub-rule (7) for each of such domestic company;

K = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investments made by the eligible Alternative Investment Fund in one or more eligible Non-Banking Financial Companies, out of any investment made by the specified person multiplied by Q and divided by R, where Q and R shall have the value assigned to them in sub-rule (8) for each such non-banking financial company; and

L = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the eligible investments made by the eligible Alternative Investment Fund in eligible InvIT, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause.

(7) For the purposes of Schedule V [Table: Sl. No. 7.D(f)] to the Act, the exempt income during the relevant tax year shall be calculated in the following manner: —

M / O × N [The Gazette prints this as a fraction: M is the numerator and O is the denominator printed beneath it, and the fraction is multiplied by N. The "/" is added here only to show that layout on one line.]

Where, —

M = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investment made by the specified person in one or more eligible domestic companies;

N = aggregate of eligible investments, appearing in the balance sheet of the eligible domestic company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year, if eligible investment has been made during the relevant tax year for the first time), made by eligible domestic company in one or more eligible infrastructure entity, out of investment made by the specified person on or after the date of notification of the specified person under the said clause; and

O = aggregate of investments, appearing in the balance sheet of the eligible domestic company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year, if eligible investment has been made during the relevant tax year for the first time), out of any investment made by the specified person.

(8) For the purposes of Schedule V [Table: Sl. No. 7.D(g)] to the Act, the exempt income during the relevant tax year shall be calculated in the following manner: —

P / R × Q [The Gazette prints this as a fraction: P is the numerator and R is the denominator printed beneath it, and the fraction is multiplied by Q. The "/" is added here only to show that layout on one line.]

Where, —

P = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investment made by the specified person in one or more eligible Non-Banking Financial Companies;

Q = aggregate of eligible lending appearing in the balance sheet of the eligible Non-Banking Financial Company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year, if eligible lending has been made during the relevant tax year for the first time) made by eligible Non-Banking Financial Company to one or more eligible infrastructure entity, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause; and

R = aggregate of lending appearing in the balance sheet of the eligible Non-Banking Financial Company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year, if eligible lending has been made during the relevant tax year for the first time) out of any investment made by the specified person.

(9) Every eligible Alternative Investment Fund, eligible domestic company and eligible Non-Banking Financial Company, which has received funds from any specified person, either directly or through eligible Alternative Investment Fund, shall furnish the details of funds received from specified persons in Form No. 177 for each tax year during which such funds or any part thereof remains invested in such Alternative Investment Fund, domestic company and non-banking finance company.

(10) The Form No. 177 referred to in sub-rule (9), shall be furnished electronically either under a digital signature or through an electronic verification code and shall be verified by the person who is authorised to verify the return of income of such Alternative Investment Fund, domestic company and non-banking finance company under section 265.

(11) The Form No. 177 referred to in sub-rule (9), shall be furnished on or before the due date referred to in section 263(1)(c) for the tax year in which the eligible investments have been first received from the specified person and all subsequent tax years till the eligible investment received from the specified person is returned.

(12) In this rule, the expressions—

(a) "specified person", "eligible infrastructure entity", "eligible Alternative Investment Fund", "eligible domestic company", "eligible Non-Banking Financial Company", "eligible InvIT" shall have the meanings respectively assigned to them in Schedule V [Table: Sl. No. 7.Note 5] of the Act;

(b) "balance sheet" means the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on 31st March of the relevant tax year which, —

(i) gives a true and fair view of the state of affairs;

(ii) complies with applicable accounting standards; and

(iii) has been audited by the auditor of the —

(A) eligible Alternative Investment Fund as per the provisions of regulation 20(5) of Securities and Exchange Board of India (Alternate Investment Fund) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or

(B) eligible domestic companies as per the provisions of section 139 of the Companies Act, 2013 (18 of 2013);

(c) "eligible investment" means an investment which has been made by an, —

(i) eligible Alternative Investment Fund on or after the 1st April, 2020, but on or before the 31st March, 2030; or

(ii) eligible domestic company on or after the 1st April, 2021, but on or before the 31st March, 2030;

(d) "eligible lending" means lending made by an eligible Non-Banking Financial Company on or after the 1st April, 2020, but on or before the 31st March, 2030;

(e) "investment" means movable and immovable assets, including current and non-current investments, loans and advances and cash and cash equivalents; and

(f) "relevant tax year" means —

(i) the tax year for which the income exempt under Schedule V [Table: Sl. No. 7] to the Act is to be calculated;

(ii) the tax year 2030-2031, for the purposes of sub-rule (5), even if exempt income under Schedule V [Table: Sl. No. 7] to the Act is not required to be calculated for that year.

Rule breakdown

Investment percentage of an eligible AIF: Rule 283(2)

The percentage for Note 5(e) is (A+B+C) divided by D, multiplied by 100.

A is the fund's eligible investments in eligible infrastructure entities or an eligible InvIT. B is its eligible investments in eligible domestic companies, multiplied by each company's sub-rule (3) percentage. C is its eligible investments in eligible NBFCs, multiplied by each NBFC's sub-rule (4) percentage. D is all its eligible investments.

Each amount is the aggregate shown in the balance sheet as on the last date of every financial year from 2021-2022 to the year just before the relevant tax year. In the year of the first investment, the balance sheet of that year is used instead.

A, B and C also include eligible investments that would have been counted if the calculation were done at any time within three months after the fund received the money.

Percentages of an eligible domestic company and NBFC: Rule 283(3) and (4)

For a domestic company (Note 5(f)), the percentage is E divided by F, multiplied by 100. E is eligible investments in eligible infrastructure entities and F is all eligible investments. E also gets the same three-month extension.

For an NBFC (Note 5(g)), the percentage is G divided by H, multiplied by 100. G is eligible lending to eligible infrastructure entities and H is all eligible lending. In the year the first loan is given, that year's balance sheet is used.

Under sub-rule (5), if a percentage is met for the relevant tax year 2030-2031, it is treated as met for 2031-2032 and every later relevant tax year.

Exempt income of a specified person: Rule 283(6) to (8)

For a unit holder of an eligible AIF (column D(e)), income is taxed as if the specified person had made the fund's investments directly. The exempt income is I+J+K+L.

I and L are income from the fund's eligible investments in eligible infrastructure entities and eligible InvITs, out of investment made by the specified person on or after the date of its notification. J and K are income from the fund's investments in eligible domestic companies and NBFCs, scaled by N/O and Q/R from sub-rules (7) and (8).

For direct investment in an eligible domestic company (column D(f)), exempt income is M divided by O, multiplied by N. For an eligible NBFC (column D(g)), it is P divided by R, multiplied by Q.

Form No. 177 and definitions: Rule 283(9) to (12)

Every eligible AIF, eligible domestic company and eligible NBFC that has received funds from a specified person, directly or through an eligible AIF, must furnish details in Form No. 177 for each tax year while the funds stay invested.

The form is furnished electronically under a digital signature or electronic verification code. It is verified by the person authorised to verify the entity's return under section 265. It is due by the section 263(1)(c) due date for the year the funds are first received and every later year until they are returned.

Eligible investment covers investments made by an eligible AIF from 1 April 2020, or by an eligible domestic company from 1 April 2021, in each case up to 31 March 2030. Eligible lending covers NBFC lending from 1 April 2020 to 31 March 2030. "Investment" includes movable and immovable assets, loans and advances, and cash and cash equivalents.

How the gazette prints this rule

The five formulas in sub-rules (2), (3), (4), (7) and (8) are printed as fractions. In the bare law below each one is written on a single line with "/", with a note explaining the printed layout.

Sub-rule (4)(a) defines G with the words "ending with the financial year". The other definitions say "ending on". Sub-rule (12)(b)(iii)(A) names the "Securities and Exchange Board of India (Alternate Investment Fund) Regulations, 2012". Both are reproduced as printed.

Sub-rule (12)(b)(iii) mentions an audit only for an eligible Alternative Investment Fund and eligible domestic companies. It does not name an auditor provision for an eligible Non-Banking Financial Company. We reproduce it as printed and add nothing.

Key takeaways

Five formulas

AIF (A+B+C)/D × 100, company E/F × 100, NBFC G/H × 100, and exempt income M/O × N and P/R × Q.

Look-through for AIFs

Investments in domestic companies and NBFCs count only to the extent of their own percentages.

2030-2031 freeze

A percentage met for 2030-2031 is treated as met for 2031-2032 and later years.

Form No. 177

Filed every year by the section 263(1)(c) due date while specified-person funds remain invested.

Practical checklist

  • Use balance-sheet figures as on the last date of every financial year from 2021-2022, as the formulas require.
  • Apply the sub-rule (3) or (4) percentage of each investee company or NBFC when working out B and C.
  • Track the date funds are received, because sub-rules (2)(c) and (3)(c) count investments made within three months.
  • File Form No. 177 every year until the specified person's investment is returned.

Avoid

  • Do not count investments made outside the eligible-investment or eligible-lending date windows in sub-rule (12).
  • Do not include investment made before the specified person's notification date in I, L, N or Q.
  • Do not stop filing Form No. 177 while any part of the funds remains invested.

FAQs

How is the investment percentage of an eligible AIF calculated?

(A+B+C) divided by D, multiplied by 100, using balance-sheet aggregates from financial year 2021-2022 to the year before the relevant tax year (Rule 283(2)).

Why are B and C multiplied by percentages?

Investments in eligible domestic companies and NBFCs count only to the extent of those entities' own infrastructure percentages under sub-rules (3) and (4).

What happens after tax year 2030-2031?

Under sub-rule (5), if the percentages are met for the relevant tax year 2030-2031, they are treated as met for 2031-2032 and later relevant tax years.

Who files Form No. 177 and by when?

Every eligible AIF, eligible domestic company and eligible NBFC that received funds from a specified person. It is filed by the section 263(1)(c) due date for the year of first receipt and each later year until the investment is returned (Rule 283(9) to (11)).

What counts as "investment"?

Movable and immovable assets, including current and non-current investments, loans and advances and cash and cash equivalents (Rule 283(12)(e)).

Glossary

Eligible investment
An investment made by an eligible AIF from 1 April 2020, or by an eligible domestic company from 1 April 2021, in each case up to 31 March 2030 (Rule 283(12)(c)).
Eligible lending
Lending by an eligible NBFC from 1 April 2020 to 31 March 2030 (Rule 283(12)(d)).
Balance sheet
The audited balance sheet as on 31 March of the relevant tax year that gives a true and fair view and complies with applicable accounting standards (Rule 283(12)(b)).
Relevant tax year
The tax year for which exempt income is calculated, and also tax year 2030-2031 for sub-rule (5) (Rule 283(12)(f)).

Official sources

Related rules