India has taken an important major step to attract more foreign money into the country. The government has expanded tax exemptions for Sovereign Wealth Funds (SWFs) and Pension funds investing in India until March 31, 2030.
This move is projected to bring long-term capital into India’s major sectors like infrastructure, energy, telecom, and other strategic sectors.
Let’s break down what this tax benefit means and why Sovereign Wealth Funds and Pension Funds in India Get Tax Exemption Until 2030 trending in the news.
Tax Exemption Details at Glance
Who can get this benefit?
This tax exemption is only for foreign Sovereign Wealth Funds and Pension Funds that are officially recognized under Section 10(23FE) of the Income-Tax-Act, 1961 can claim this benefit. Some well-known names that qualify consist of:
- MIC Redwood, Abu Dhabi’s SWF
- Norfund from Norway
- Canada Pension Plan Investment Board (CPP)
- Ohio School Employees’ Retirement System
- Ontario Pension entities
What income is tax-free?
If these authorized funds invest in India, then they won’t have to pay tax on:
- Dividends
- Interest income
- Long-term capital gains
As long as income is from eligible and verified investments, it is tax-free.
What types of investments are covered?
The tax benefits just applies if these funds invest in:
- Infrastructure projects like roads, ports, power, logistics, and telecommunications.
- Strategic sectors which are defined under India’s original 2020 policy
Quick Background: How This Rule Came About
India first introduced this tax exemption in the 2020 Union Budget. The main goal was to promote long-term foreign investment in infrastructure by making it tax-free for eligible Sovereign Wealth Funds and Pension Funds.
- Originally, the tax break was permitted until March 31, 2024
- In 2023, it was extended in brief until March 31, 2025
- And now, in July 2025, the government has officially extended it again, this time until March 31, 2030
This tax extension was confirmed during the Union Budget 2025–26 and supported by official CBDT notifications dated July 11, 2025.
Why This Tax Exemption Matters
1. Helps attract long-term foreign investments
Big infrastructure projects need stable funding over a long period of time and this tax break gives SWFs and pension funds a solid reason to commit their capital in India for the long period of time.
2. Supports India’s $5 trillion economy goal
Huge plans like PM Gati Shakti and the National Infrastructure Pipeline (NIP) need a lot of funds. Foreign institutional investors are crucial to making these plans work. The tax relief helps position India as a trustworthy place to invest.
3. Strengthens India – Gulf ties
India is also offering tax exemption to Saudi Arabia’s Public Investment Fund (PIF) and its incentives to invest in Indian equities. This clearly shows how India is building solid economic ties with Gulf countries while opening up its markets.
Which Funds Will Benefit?
As per the CBDT Notification Ns. 74/2025 to 97/2025, issued on July 11, 2025, the following funds now enjoy tax exemption until 2030:
- MIC Redwood 1 RSC (Abu Dhabi)
- Norfund (Norway)
- Canada Pension Plan Investment Board
- Ohio School Employees’ Retirement System
Other big names like GIC, Temasek, and Kuwait Investment Authority already had qualifications from earlier phases.
What Experts Are Saying
Financial experts are calling this tax-exemption a “positive policy signal”. It gives huge global funds the confidence that India is dedicated to providing a stable investment environment.
One analyst explained: “This move shows India is serious about drawing long-term money. Sovereign Wealth Funds and Pension Funds look for clarity and stability and this extension provides both”.
Even so, some advisors say that infrastructure projects usually take 10 to 15 years to complete and they also suggest that the 2030 deadline may still be a bit short, and the government may need to extend it again.
What Should Investors Do Now?
If you represent a sovereign wealth fund or pension fund, here is what you need to do and keep in mind:
- Check your eligibility under Section 10(23FE), in which only recognized funds can benefit from it.
- Mark the timeline, because the tax exemption is valid only until March 32, 2030.
- Always choose the right sector and focus on infrastructure, energy, telecom, or other notified strategic sectors.
- Plan for the long-term, because the earlier you start investing, the more you can benefit during the tax-free period.
- Stay updated by keeping a close eye for further policy or possible deadline extensions.
Final Thoughts
By extending the tax exemptions for Sovereign Wealth Funds and pension funds, India is giving a clear message that it wants to be the top destination for long-term global capital.
This policy doesn’t just help investors to save on taxes, it supports India’s big infrastructure and economic goals. For long-term investors, mainly global pension and sovereign funds, this is a golden opportunity to invest in India with clarity, confidence, and tax efficiency.
FAQs
Who qualifies for this tax exemption in India?
Foreign Sovereign Wealth Funds and pension funds informed by CBDT under Section 10(23FE) like MIC Redwood, and CPP investment board.
What income is exempted from tax?
Income like dividend, interest, and long-term capital gains from eligible investments in India are tax-free.
How long is the exemption valid?
It is valid until March 31, 2030 as per official CBDT notifications dated July 11, 2025.
Which type of investments qualify?
Only investments in infrastructure and strategic sectors like roads, ports, telecom, power and renewables.
Is there a limit on the exemption amount?
There is no cap, but only income from eligible investments qualifies.