Taxation of Alternate Investment Funds (AIF)
EXEMPTION OF CENTRAL GOVERNMENT SUBSIDY OR GRANT OR CASH ASSISTANCE, ETC. TOWARDS CORPUS OF FUND
May 1, 2016The Direct Tax Dispute Resolution Scheme 2016
November 2, 2016Chapter XIIFB- Sec 115UB
| Taxation of Income | Nature of Income | Taxable Entity/Person | Rate of tax |
| Investment income | Investor – fund enjoys pass through status
Investment income is exempt for a fund u/s 10(23FBA) |
As applicable for the investor | |
| Business income | Investment fund | If fund is a company or firm – rates as per Finance Act
Any other case – maximum marginal rate |
|
| Loss (prior to Sec 10(23FBA) | – such loss shall be allowed to be carried forward and it shall be set-off by the investment fund in accordance with the provisions of Chapter VI; and
– the investor shall not be eligible to set off such loss |
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| Applicability of distribution tax | There shall be no distribution tax on incomes distributed by an investment fund | ||
| Deemed distribution of income | Any investment income of the investment fund,if not paid or credited to the investor shall be deemed to have been credited to the account of the investor on 31st March of the previous year in which he is entitled to receive | ||
| Furnishing information to the unitholder/investor | On or before 30th June in Form 64C | ||
| Furnishing information to the Principal Commissioner /CIT | On or before 30th Nov in Form 64D | ||
Note:
“Investment fund” means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or a Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992)
Any income which has been included in total income of the investor in a previous year, on accrual basis, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the investment fund