Notification of National Bank for Financing Infrastructure and Development for the purposes of 10(48D) of the Income tax Act, 1961

## Report on Notification Regarding National Bank for Financing Infrastructure and Development **1. Executive Summary:** This report analyzes a notification issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, concerning the National Bank for Financing Infrastructure and Development (NaBFID). The notification, effective from April 18, 2022, grants NaBFID an exemption under clause 48D of section 10 of the Income-tax Act, 1961, for ten consecutive assessment years beginning from the assessment year 2022-2023. This exemption is likely intended to incentivize and support the bank’s operations related to infrastructure financing and development. **2. Introduction:** This report aims to provide a comprehensive overview of a notification pertaining to the National Bank for Financing Infrastructure and Development (NaBFID). The analysis is based solely on the text of the notification issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, published in the Gazette of India on April 18, 2022. **3. Policy Overview:** * This is a *new* policy notification (not an amendment) clarifying aspects under the Income-tax Act, 1961. * **Core Objective:** To provide an income tax exemption to the National Bank for Financing Infrastructure and Development (NaBFID) under clause 48D of section 10 of the Income-tax Act, 1961. **4. Background and Rationale:** As a new policy notification, this likely addresses the need to facilitate and incentivize the operations of the newly established NaBFID. Infrastructure development typically requires significant capital investment and can face challenges in attracting funding. Providing tax exemptions can enhance the financial viability of NaBFID and encourage its participation in infrastructure projects. **5. Key Provisions / Changes:** As this is a new policy notification, the key provision is: * The notification grants the National Bank for Financing Infrastructure and Development (NaBFID) an exemption under clause 48D of section 10 of the Income-tax Act, 1961. * This exemption is valid for ten consecutive assessment years, starting from the assessment year 2022-2023. **6. Target Audience and Stakeholders:** The primary target audience is the National Bank for Financing Infrastructure and Development (NaBFID) itself. Other stakeholders include: * The Ministry of Finance, Department of Revenue, and Central Board of Direct Taxes (CBDT), responsible for administering the Income-tax Act. * Entities seeking financing for infrastructure projects, as NaBFID's operations are directly linked to infrastructure development. * Investors and financial institutions potentially partnering with NaBFID. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The Central Board of Direct Taxes (CBDT) is responsible for administering the Income-tax Act and ensuring compliance with this notification. * **Timeline:** The exemption is valid for ten consecutive assessment years, beginning from the assessment year 2022-2023. This implies a specific timeframe for which NaBFID can avail of the tax benefit. The notification is effective from the date of its publication in the Official Gazette (April 18, 2022). **8. Expected Outcomes / Impact of Changes:** The expected outcomes of this notification include: * Increased financial viability for NaBFID, making it more attractive to investors and enabling it to provide competitive financing options for infrastructure projects. * Stimulation of investment in infrastructure development by improving the financial prospects for NaBFID. * Overall, this tax exemption aims to bolster the role of NaBFID in addressing the infrastructure financing gap in India. **9. Conclusion:** The notification granting NaBFID an income tax exemption for ten assessment years is a significant measure to support the bank's operations and promote infrastructure development. This exemption is designed to make NaBFID more financially viable and incentivize its participation in vital infrastructure projects. The policy underscores the government's commitment to addressing the infrastructure financing needs of the country.

Key Entities Referenced