Pension funds to get tax benefits for infrastructure investments in India

The centre has decided to offer tax benefits to global pension funds on their investments in the infrastructure sector as it seeks to attract investments in the road, port and airport sectors. The decision, which was part of Union Budget 2020-21, was recently approved by Parliament. It extends tax benefits that were previously proposed only for sovereign wealth funds to pension funds as well. In February 2020, it was proposed that tax exemption be offered to sovereign funds on interest, dividend and capital gains on the investments made in the infrastructure sector before March 31, 2024. This amendment gives tax exemption to pension funds not only on their direct investments but also on investments in infrastructure investment trusts (InvITs) and in Category I and Category II alternative investment funds that invest in the infrastructure sector.