The Indian government has decided to waive off the 3-year lock-¬in period on investments made by non--residents in infrastructure debt funds (IDFs), to promote funding in the infrastructure sector. The Central Board of Direct Taxes (CBDT) issued a notification in this regard. With an aim to accelerate and enhance the flow of long term debt in infrastructure projects, amendments in the tax laws were made to provide exemption from income tax to infrastructure debt funds (IDFs) in 2011. To attract off¬shore investments into IDFs, any amount of interest received by non¬resident or foreign company from investment in such IDFs is charged at a reduced tax rate of 5 percent. IDFs are investment vehicles to accelerate the flow of long term debt to the sector. However, all these benefits are available only when IDF is set up as per the prescribed guidelines and fulfil required conditions. One such condition was that the investment made by a non¬resident in bonds should be subject to a lock¬in period of three years except where transfer is made to another nonresident which has been waived off and the decision will make investments in bonds issued by IDF more attractive for offshore investors.