Section 9A
Offshore Fund Manager (Safe Harbour) Regime
Section 9A of the Income Tax Act, 1961, inserted by the Finance Act, 2015 (effective April 1, 2015), provides that an "eligible investment fund" is not treated as a tax resident of India, or as having a "business connection" in India, merely because an "eligible fund manager" undertaking its fund-management activity is located in India. Without this safe harbour, ordinary source-based taxation rules would otherwise deem a foreign fund to have a taxable presence in India whenever its manager sits in India, discouraging fund managers from relocating here.
- Eligibility conditions for the fund and the fund manager are laid out in sub-sections (3), (4), and (5) of Section 9A, operationalised through Rules 10V, 10VA, 10VB (notified 2016) of the Income Tax Rules, 1962
- Historically the regime required, among other things, minimum corpus size, limits on the share of Indian-resident investors' contribution (capped around 5%), restrictions on the fund's control/management from India, and a monitoring fee/remuneration floor for the Indian fund manager — together making compliance onerous
- The 2026 Bill is reported to cut these conditions sharply (from roughly 13 to about 5), retaining core safeguards — non-residence of the fund, location in a DTAA/notified jurisdiction, a cap on Indian-resident participation, and no control of business in India
● Tracked since August 03, 2026 · last seen August 04, 2026 · updates as the daily brief publishes
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