Source: The Hindu Business Line, May 19, 2019
New Delhi: Asset management companies (AMCs) can now graduate from being mere ‘advisors’ to offshore funds to becoming a direct, “full fledged manager” of such funds out of India. This comes after the Central Board of Direct Taxes (CBDT) removed a taxation related constraint that prevented Indian AMCs from taking up direct fund management activity for the offshore funds.
The CBDT has clarified that SEBI-approved asset management companies will be designated as ‘eligible fund manager’ and therefore entitled for benefits under Section 9A of the income tax law. This would mean that fund management activities carried for offshore funds by such AMCs would not be regarded as having a ‘business connection’ and would not result in a taxable presence of such offshore funds in India.
Even if the overseas fund is managed by AMCs from India there will be no adverse tax consequences for the overseas funds here. Hence, their global incomes will not be subjected to tax in India. Read the rest of this entry »