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CMA Intermediate · Direct and Indirect Taxation · Income which does not form part of Total Income

Under Schedule V of the Income-tax Act, 2025, for the purposes of Sl. No. 7, which of the following is an 'eligible domestic company' in which a specified person's investment can qualify for the exclusion?

The domestic company registered on 1 June 2022 with 80% of its investments in eligible infrastructure entities qualifies. It must be set up and registered on or after 1 April 2021 and have at least 75% investments in such entities; the other options fail one test.

  1. AA domestic company set up and registered on 1 July 2019 with 90% of its investments in eligible infrastructure entities
  2. BA domestic company set up and registered on 1 June 2022 with 60% of its investments in eligible infrastructure entities
  3. CA domestic company set up and registered on 1 June 2022 with 80% of its investments in eligible infrastructure entitiesCorrect
  4. DA foreign company set up on 1 June 2022 with 100% of its investments in eligible infrastructure entities

Explanation

An eligible domestic company must be a domestic company set up and registered on or after 1 April 2021 and have minimum 75% investments in eligible infrastructure entities. The 2022 company with 80% meets both tests. The 2019 company fails the date test, the 60% company fails the investment test, and a foreign company is not a domestic company.

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