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Foreign investors with domestic AIFs in IFSC don’t need to get PAN

Foreign investors with domestic AIFs in IFSC don’t need to get PAN

The Income Tax department has exempted foreign investors from obtaining PAN in domestic Alternative Investment Funds (AIFs) operating in International Financial Services Centre (IFSC) if TDS has been deducted from their income by the fund. The move has been enacted after a long-pending demand from investment funds and is expected to help bring in higher investment capital.
The Central Board of Direct Taxes (CBDT) has inserted new Rule 114AAB notifying class or classes of persons to whom provisions of Section 139A of Income Tax Act for mandatory obtaining PAN shall not apply, specifying that the provisions shall not apply to a non-resident if the non-resident does not earn any income in India, other than the income from investment in Category I or Category II Alternative Investment Fund (AIF) located in IFSC in India, and if TDS on such income is deducted by the specified fund.
“AIFs, especially Category I & II, being the class of pooled-in vehicles for investing in real estate and private equity, attract HNI investors. Now with this exemption of need for PAN Card granted to NRIs to invest in those AIFs based in IFSC, it could attract a new investor base and aim for higher investment capital,” Srinath Sridharan, senior BFSI leader, said

 

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