SWFs and Pension Funds to Enjoy Tax Exemption Until 2030

The Central Government has extended the tax exemption for Sovereign Wealth Funds (SWFs) and Pension Funds on eligible investments in India until March 31, 2030. This move, announced officially on July 12, 2025, aims to attract more long-term foreign investment into key infrastructure sectors like energy, telecom, and logistics.

Boosting Long-Term Capital in Infrastructure

The tax exemption covers income from dividends, interest, and long-term capital gains earned by specified foreign funds on their investments in India. This is expected to encourage more global funds to invest in India’s fast-growing infrastructure, which needs large, sustained capital flows.

The government introduced this benefit in 2020 under Section 10(23FE) of the Income Tax Act, with the goal of increasing financial support for critical development areas such as roads, ports, power, telecom, and logistics.

Timeline and Previous Announcements

Initially, the exemption was allowed for investments made between April 1, 2020, and March 31, 2024. It was then extended to March 31, 2025, as announced in the 2024-25 Interim Budget by Finance Minister Nirmala Sitharaman.

Now, the benefit will remain available until the end of FY 2029–30. The Department of Revenue officially notified this extension, turning it into policy.

Growing Interest from Foreign Funds

According to NSDL data, the assets held by sovereign wealth funds in Indian companies rose by 60% year-on-year, reaching ₹4.7 lakh crore by April 2024. This shows rising interest from global investors in India’s growth and infrastructure push.

By continuing these tax benefits, the government hopes to build investor confidence, support its infrastructure goals, and ensure steady capital inflow from large global institutions.