CBDT clarification regarding eligibility of exemption under clause (23FE) of section 10

The Central Board of Direct Taxes vide notification dated 26th October, 2021 has clarified that eligibility of exemption under clause (23FE) of section 10 of IT Act of the Act shall be subject to following:

1. If the loans and borrowings have been taken by the specified fund or any of its group concern, specifically for the purposes of making investment by the specified fund in India, such fund shall not be eligible for exemption under clause (23FE) of section 10 of the Act; and
2. If the loans and borrowings have been taken by the specified fund or any of its group concern, not specifically for the purposes of making investment in India, it shall not be presumed that the investment in India has been made out of such loans and borrowings and such specified fund shall be eligible for exemption under clause
   23(FE) of section 10 of the Act, subject to the fulfillment of all other conditions under the said clause, provided that the source of the investment in India is not from such loans and borrowings.