Amit Kedia, Chartered Accountant, Mumbai
The Indian and overseas fund industry are an integral part of the Indian financial services sector. Given the importance of the fund industry in raising growth capital for the country, it is hoped that the Budget 2021 would focus to make it more attractive for the domestic and overseas investors to invest in Indian public and private Indian companies. Some tax and regulatory changes expected from Budget 2021 includes providing tax pass through status for Category III alternate investment funds (AIFs), allowing expense deduction incurred by the AIFs to the investors, providing GST waiver on management fees charged by AIFs to overseas investors, reduction in the tax rate for unlisted securities, providing tax exemption to offshore funds upon redomiciling to IFSC GIFT City, providing indirect transfer exemption to foreign entities in case of corporate actions, etc. These changes could go a long way in making India a favourite investment destination especially for the overseas investors.