1Investors in the feeder
Generally no Indian tax
Are the feeder’s investors taxed in India?
Non-residents in a feeder that is a specified fund: nothing they receive from it, and no gain on its units, is included in their income in India.
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Schedule VI, Sl. 9
9. Any income accruing or arising to, or received from a specified fund or on transfer of units in a specified fund. A unit holder of a specified fund. Nil.
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
2GIFT IFSC feeder (specified fund)
Foreign income left out
Does the feeder pay tax on income from the overseas master?
Income from securities issued by a non-resident (not through a permanent establishment in India), where it does not otherwise arise in India, is left out of the feeder’s income.
Gains on transferring securities other than shares of Indian companies are also left out. Both apply to the extent they belong to non-residents’ units.
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Schedule VI, Sl. 3
3. Any income from securities issued by a non-resident where such securities are not issued by a permanent establishment of a non- resident in India. Any specified fund. (a) Such income otherwise does not accrue or arise in India; (b) As specified in clauses (b) and (c) of column D against Sl. No. 1.
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
Schedule VI, Sl. 2
2. Any income accrued or arisen to, or received, as a result of transfer of securities (other than shares in a company resident in India). Any specified fund. As specified in clauses (b) and (c) of column D against Sl. No. 1.
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
3Overseas master fund
Taxed under its own rules
Is the overseas master taxed in India?
Taxed under its own country’s rules.
What to check: The Act has no rules written specifically for master and feeder funds, so each level is taxed under the general rules shown on this page.
If the feeder takes money from Indian residents, it is not a specified fund: see Outbound.
