Rule 283 of the Draft Income-tax Rules, 2026 prescribes the method for computing minimum investment percentages and exempt income under Schedule V (Table Sl. No. 7) of the Income-tax framework. The rule specifies formula-based calculations to determine the proportion of eligible investments made by eligible Alternative Investment Funds (AIFs), domestic companies, and Non-Banking Financial Companies (NBFCs) in infrastructure entities or InvITs. For AIFs, the investment percentage is computed using a formula that compares aggregate eligible investments in infrastructure entities, domestic companies, and NBFCs with the total eligible investments recorded in the balance sheets from FY 2021-22 to the financial year preceding the relevant tax year. Separate formulas are also prescribed to determine the proportion of infrastructure investments made by eligible domestic companies and infrastructure lending undertaken by eligible NBFCs. Special provisions apply where the relevant tax year is the first year of investment or lending, allowing calculations based on the balance sheet of that year. Investments received within three months may also be considered in the computation. The rule further provides that percentage conditions satisfied for tax year 2030-31 will be deemed satisfied for tax year 2031-32 and subsequent years. It also outlines detailed formulas for calculating exempt income attributable to specified persons investing through AIFs, domestic companies, NBFCs, or InvITs by allocating income proportionately to eligible infrastructure investments. Additionally, entities receiving funds from specified persons must electronically furnish Form No. 177 for each tax year until the investment is returned. The rule also defines key terms such as eligible investment, eligible lending, balance sheet, and relevant tax year, while specifying the investment period limits applicable to AIFs, domestic companies, and NBFCs.
Extract of Rule No. 283 of Draft Income-tax Rules, 2026
Rule 283
Computation of minimum investment and exempt income for the purposes of Schedule V [Table: Sl. No. 7] of the Act.
(1) For the purposes of Schedule V [Table: Sl. No. 7], the percentages referred to in Note 5(e), 5(f), 5(g), and the exempt income referred to in clauses (e), (f) and (g) of column D shall be calculated in accordance with this rule.
(2) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(e)] shall be calculated in the following manner, namely: –
(A+B+C)
______× 100
D
Where, –
A = Aggregate of eligible investments, appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible infrastructure entity or in an eligible INvIT;
B = Aggregate of eligible investments, appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible domestic companies, multiplied by the percentage for those domestic company or companies determined in accordance with sub-rule (3);
C = Aggregate of eligible investments appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible Non-Banking Financial Companies, multiplied by the percentage for those non-banking financial company or companies determined in accordance with sub-rule (4); and
D = Aggregate of eligible investments appearing in the balance sheet of the eligible Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year;
(b) In a case where the relevant tax year is the year in which the first investment is made by the eligible Alternative Investment Fund, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant tax year as on the last date of that year;
(c) The amounts A, B and C shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the eligible Alternative Investment Fund.
(3) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(f)] shall be calculated in the following manner, namely: –
E
___ × 100
F
Where, –
E = Aggregate of eligible investments, appearing in the balance sheet of the eligible domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year, made in one or more eligible infrastructure entity; and
F = Aggregate of eligible investments appearing in the balance sheet of the eligible domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year;
(b) In a case where the relevant tax year is the year in which the first investment is made by the eligible domestic company, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant tax year as on the last date of that year;
(c) The amount E shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the eligible domestic company.
(4) (a) The percentage referred to in Schedule V [Table: Sl. No. 7.Note 5(g)] shall be calculated in the following manner, namely: –
G
___× 100
H
Where, –
G = Aggregate of eligible lending, appearing in the balance sheet of the eligible Nonbanking Financial Company as on the last date of all the financial years starting from the financial year 2021-22 and ending with the financial year immediately preceding the relevant tax year, made to one or more eligible infrastructure entity; and
H = Aggregate of eligible lending appearing in the balance sheet of the eligible Nonbanking Financial Company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant tax year; (b) In a case where the relevant tax year is the year in which the first debt or loan is extended by the eligible Non-Banking Financial Company, the above amounts shall be calculated using the aggregate of eligible lending appearing in its balance sheet of the relevant tax year as on the last date of that year.
(5) For the purposes of sub-rule (2), (3) and (4) above, the percentages referred therein for the relevant tax year 2031-32 and for subsequent relevant tax years shall be deemed to have been satisfied if the same is satisfied for the relevant tax year 2030-31.
(6) For the purposes of exempt income referred to in Schedule V [Table: Sl. No. 7.D(e)], —
(a) the income accrued or arisen or attributed to, or received by the specified person, who is a unit holder of an eligible Alternative Investment Fund, out of investment made in that fund, shall be chargeable to income-tax in the same manner as if it were the income accrued or arisen or attributed to, or received by, such person had the investment made by such investment fund been made directly by him;
(b) the calculation of exempt income of the specified person arising from the investment in such fund during the relevant tax year shall be made in the following manner, namely: –
I+J+K+L
Where, –
I = Income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the eligible investments made by the eligible Alternative Investment Fund in eligible infrastructure entity, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause;
J = Income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investments made by the eligible Alternative Investment Fund in one or more eligible domestic companies, out of any investment made by the specified person multiplied by N and divided by O, where N and O shall have the value assigned to them in sub-rule (7) for each of such domestic company;
K = Income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investments made by the eligible Alternative Investment Fund in one or more eligible Non-Banking Financial Companies, out of any investment made by the specified person multiplied by Q and divided by R, where Q and R shall have the value assigned to them in sub-rule (8) for each such non-banking financial company; and
L = Income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the eligible investments made by the eligible Alternative Investment Fund in eligible InvIT, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause.
(7) For the purposes of Schedule V [Table: Sl. No. 7.D(f)], the exempt income during the relevant tax year shall be calculated in the following manner, namely: –
M
___× N
O
Where, –
M = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investment made by the specified person in one or more eligible domestic companies;
N = Aggregate of eligible investments, appearing in the balance sheet of the eligible domestic company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year if eligible investment has been made during the relevant tax year for the first time), made by eligible domestic company in one or more eligible infrastructure entity, out of investment made by the specified person on or after the date of notification of the specified person under the said clause; and
O = Aggregate of investments, appearing in the balance sheet of the eligible domestic company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year if eligible investment has been made during the relevant tax year for the first time), out of any investment made by the specified person.
(8) For the purposes of Schedule V [Table: Sl. No. 7.D(g)], the exempt income during the relevant tax year shall be calculated in the following manner, namely: –
P
___× Q
R
Where, –
P = income accrued or arisen or attributed or received during the relevant tax year, computed in accordance with the provisions of the Act, from the investment made by the specified person in one or more eligible Non-Banking Financial Companies;
Q = Aggregate of eligible lending appearing in the balance sheet of the eligible Nonbanking Financial Company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year if eligible lending has been made during the relevant tax year for the first time) made by eligible Non-Banking Financial Company to one or more eligible infrastructure entity, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause; and
R = Aggregate of lending appearing in the balance sheet of the eligible Non-Banking Financial Company as on the last date of the tax year immediately preceding the relevant tax year (last date of the relevant tax year if eligible lending has been made during the relevant tax year for the first time) out of any investment made by the specified person.
(9) Every eligible Alternative Investment Fund, eligible domestic company and eligible Nonbanking Financial Company, which has received funds from any specified person, either directly or through eligible Alternative Investment Fund, shall furnish the details of funds received from specified persons in Form No. 177 for each tax year during which such funds or any part thereof remains invested in such Alternative Investment Fund, domestic company and non-banking finance company.
(10) Form No. 177 shall be furnished electronically either under a digital signature or through an electronic verification code and shall be verified by the person who is authorised to verify the return of income of such Alternative Investment Fund, domestic company and non-banking finance company under section 265.
(11) Form No. 177 shall be furnished on or before the due date referred to in section 263(1)(c) of the Act for the tax year in which the eligible investments have been first received from the specified person and all subsequent tax years till the eligible investment received from the specified person is returned.
(12) In this rule, the expressions—
(a) “specified person”, “eligible infrastructure entity”, “eligible Alternative Investment Fund”, “eligible domestic company”, “eligible Non- Banking Financial Company”, “eligible InvIT” shall have the same meaning as defined in Schedule V [Table: Sl. No. 7.Note 5];
(b) “balance Sheet” means the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on 31st day of March of the relevant tax year which, –
(i) gives a true and fair view of the state of affairs;
(ii) complies with applicable accounting standards; and
(iii) has been audited by the auditor of the, –
(A) eligible Alternative Investment Fund as per the provisions of regulation 20(5) of Securities and Exchange Board of India (Alternate Investment Fund) Regulations, 2012; or
(B) eligible domestic companies as per the provisions of section 139 of the Companies Act, 2013;
(c) “eligible investment” means an investment which has been made by an, —
(i) eligible Alternative Investment Fund on or after the 1st day of April, 2020, but on or before the 31st day of March, 2030; or
(ii) eligible domestic company on or after the 1st day of April, 2021, but on or before the 31st day of March, 2030;
(d) “eligible lending” means lending made by an eligible Non-Banking Financial Company on or after the 1st day of April, 2020, but on or before the 31st day of March, 2030;
(e) “investment” shall mean movable and immovable assets, including current and noncurrent investments, loans and advances and cash and cash equivalents;
(f) “relevant tax year” means —
(i) the tax year for which the income exempt under Schedule V [Table: Sl. No. 7] is to be calculated;
(ii) the tax year 2030-31, for the purposes of sub-rule (5) above, even if exempt income under Schedule V [Table: Sl. No. 7] is not required to be calculated for that year.
