CBDT Clarifies on taxability of income earned by a non-resident investor from off-shore investments routed through an Alternate Investment Fund

Jul 15, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Direct Taxes (CBDT) on July 03, 2019, has clarified on taxability of income earned by a non-resident investor from off-shore investments routed through an Alternate Investment Funds (AIFs).

Section 115UB(1) of the Income-tax Act, 1961, provides that the investments made by Category I or Category II AIFs are deemed to have been made by the investor directly, Therefore, CBDT clarified that any income in the hands of the non-resident investor from off-shore investments routed through the Category I or Category II AIF, being a deemed direct investment outside India by the non-resident investor, is not taxable in India.

It is further clarified that loss arising from the off-shore investment relating to non-resident investor, being an exempt loss, will not be allowed to be set-off or carried-forward and set off against the income of the Category I or Category II AIF.

[Circular No. 14 /2019]


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