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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, which of the following is an essential condition for the income of a specified person (such as a sovereign wealth fund) from an investment in an eligible InvIT to be left out of total income?

The investment must be made in India between 1 April 2020 and 31 March 2030 and be held for at least three years, in one of the prescribed investees such as an eligible InvIT. Shorter holding periods or other dates do not satisfy Schedule V Sl. No. 7.

  1. AThe investment is made in India on or after 1 April 2020 but on or before 31 March 2030 and is held for at least three yearsCorrect
  2. BThe investment is held for at least one year and is made at any time after 1 April 2010
  3. CThe investment is held for at least five years and is made only in listed equity shares
  4. DThe investment is made only through a loan to the investee and is held for at least three years

Explanation

Sl. No. 7 requires that the investment be made on or after 1 April 2020 but on or before 31 March 2030, be held for at least three years, and be in a listed type of investee such as an eligible InvIT, eligible infrastructure entity, eligible AIF, eligible domestic company or eligible NBFC. The one-year and five-year periods do not appear in the text, and the investment may be debt, share capital or units, not loans only.

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