The CBDT has provided clarification on the tax implications of the earnings generated by a non-resident investor through offshore investments in an investment fund channeled via an Alternative Investment Fund.

The CBDT has provided clarification on the tax implications of the earnings generated by a non-resident investor through offshore investments in an investment fund channeled via an Alternative Investment Fund.

The definition of 'investment fund' in the Income-tax Act, of 1961 underwent an amendment through the Finance Act of 2023. This amendment incorporated a reference to the International Financial Services Centres Authority (Fund Management) Regulations, 2022, established under the International Financial Services Centres Authority (IFSCA) Act, 2019.

Because of the aforesaid amendment in the definition of ‘investment fund’, para 3 of Circular No. 14/2019 dated July 03, 2019, is to be read as under:

The official notification can be viewed from this link:  https://incometaxindia.gov.in/communications/circular/circular-no-12-2023.pdf 

Also Read: ITR Filing 2023: Choosing between AIS and Form 26AS for Filing Your ITR: A Comparative Analysis