Page 17 - Budget_2020

Union Budget 2020
Exemptions
Exemption for Wholly Owned Subsidiary of Abu Dhabi Investment Authority (ADIA) and Sovereign Wealth Fund
 In order to promote investment of sovereign wealth fund, it is proposed to exempt any income of a
specified person in the nature of dividend, interest or long-term capital gains arising from an investment
made by it in India, u/s 10
 Such investment should be in an enterprise carrying on the business of developing, operating or
maintaining any infrastructure facility or such other business as may be notified by the Central
Government.
 The investment is required to be made on or before 31st March, 2024 with a lock-in period of at least 3
years.
 Certain ownership and regulatory conditions need to be fulfilled by both the specified organisations for
the purpose of claiming exemption
AY 2021-22 and subsequent AYs

One of the conditions states that the Sovereign Wealth Fund, should not be carrying on any commercial activity
either within or outside India. Proving the existence or otherwise of such a condition, in practice, could be a
really difficult exercise and might lead to frivolous litigation.

Exemption for Indian Strategic Petroleum Reserves Limited (ISPRL)
 In order to incentivise oil storage, it is proposed to exempt any income accruing or arising to ISPRL, as a
result of an arrangement for replenishment of crude oil stored in its storage facility in pursuance to
directions of the Central Government
 This exemption shall be subject to the condition that the crude oil is replenished within 3 years from the
end of the FY in which the crude oil was removed from the storage facility for the first time.
AY 2021-22 and subsequent AYs

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