CBDT Notifies List of 121 Countries for Eligible Investment Funds under Sec 9A of the Income Tax Act [Read Notification]

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The Central Board of Direct Taxes (CBDT) yesterday notified a list of 121 countries for ‘eligible investment funds’ under section 9A of the Income Tax Act.

Section 9A of the Income Tax Act provides for safe harbour provisions whereby an ‘eligible investment fund’ shall not be regarded as a tax resident in India merely because an ‘eligible fund manager’ undertaking fund management activities on its behalf is located in India. Benefits under the safe harbour provisions are subject to compliance with certain conditions prescribed under section 9A(3). Further, these provisions are to be applied in accordance with the guidelines to be prescribed by the CBDT.

Section 9A has been inserted in the Income Tax Act with intent to remove adverse tax consequences due to presence of fund manager in India managing the Funds of Foreign Portfolio Investors. The section provides that in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund.

Further, an eligible investment fund shall not be said to be resident in India for this purpose merely because the eligible fund manager, undertaking fund management activities on its behalf, is situated in India.

Read the full text of the Notification below.

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