July 24, 2023
The Central Board of Direct Taxes (CBDT) has issued a circular clarifying that NRIs who invest in AIFs set up in GIFT City will not be liable to pay taxes in India on the income generated from such investments.
This is a significant development for NRIs who are looking to invest in India, as it provides them with a tax-efficient way to do so. GIFT City is a special economic zone (SEZ) located in Gujarat, India, and it offers a number of benefits to investors, including a favorable tax regime.
The CBDT’s circular clarifies that the tax exemption will apply to all types of AIFs that are set up in GIFT City, including venture capital funds, private equity funds, and hedge funds. The exemption will also apply to income generated from both debt and equity investments.
In order to qualify for the tax exemption, NRIs must meet certain requirements. They must be residents outside India for tax purposes, and they must invest in an AIF that is registered with the Securities and Exchange Board of India (SEBI).
The tax exemption is a welcome move for NRIs who are looking to invest in India. It will make it more attractive for NRIs to invest in AIFs that are set up in GIFT City, and it will help to boost the growth of the Indian financial sector.
Here are some additional details about the tax exemption:
