Archive · 3 Aug 2026
India Proposes Tax Relief for Offshore Funds Using Local Managers
India wants to make it easier for foreign investment funds to use local managers.
The new rules would let these funds skip some old requirements, like having a big minimum size or many different investors.
They still can’t let more than 5% of the fund come from Indian investors, and they can’t run Indian businesses.
The goal is to bring more money into India and help local fund managers grow.
The changes need Parliament to approve them first.
Draft bill would remove minimum corpus and investor diversification rules for offshore funds under safe harbour.
Offshore funds could appoint India‑based managers without triggering Indian tax liability.
Domestic investors still limited to 5% of a fund’s assets to qualify for exemption.
Funds must not control Indian businesses to remain outside Indian tax net.
Proposal aims to attract overseas capital and boost India’s fund‑management industry.
- Who
- Indian government, Ministry of Finance
- What
- Proposes tax relief for offshore investment funds using India‑based managers
- When
- 2024
- Where
- India
- Why
- To attract overseas capital and strengthen India as a fund‑management hub
- Proposed changes
- Removal of minimum corpus and investor diversification requirements for offshore funds under safe harbour
- Domestic investor limit
- 5% of a fund’s assets to qualify for exemption
- Tax liability risk
- Up to 38% if conditions are not met
- Goal
- Attract overseas capital and boost India’s fund‑management industry
- Approval needed
- Parliamentary approval required
