Taxation of Alternate Investment Funds (AIF)

Taxation of Alternate Investment Funds (AIF)

Chapter 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

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



“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

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