1Overseas feeder funds
Generally no Indian tax
Are the overseas feeders taxed in India?
As non-resident unit holders of a specified fund, nothing they receive from the master, 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 master fund (specified fund)
Fund pays tax on its Indian income
How is the master fund taxed?
Indian income: 10% on income from securities, and capital gains on Indian securities at the section 210 rates.
Income from foreign securities and gains on securities other than Indian shares are left out, to the extent they belong to non-residents’ units.
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Section 210(1)
210. (1) The income-tax payable on the total income of an assessee, being a specified fund or Foreign Institutional Investor, which includes income referred to in column B of the Table below, shall be the aggregate of income-tax computed at the rate specified in the column C applied on the corresponding income specified in column B. TABLE Sl. No. Income Rate of Income-tax payable A B C 1. Income in respect of securities other than units referred to in section 208. (a) 20% in case of Foreign Institutional Investor; (b) 10% in case of specified fund. 2. Short-term capital gains (not being short-term capital gains referred to in section 196) arising from the transfer of such securities. 30% 3. Short-term capital gains referred to in section 196 arising from the transfer of such securities. 20% 4. Long-term capital gains (not being long-term capital gains referred to in section 198 arising from the transfer of such securities). 12.5% 5. Long-term capital gains referred to in section 198 arising from the transfer of such securities which exceeds ₹125000. 12.5% 6. Total income as reduced by income referred to against serial numbers 1 to 5. Rates in force.
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. 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
3Moving an existing offshore fund into GIFT IFSC
Can be exempt, with conditions
Is moving an offshore fund into GIFT IFSC taxed?
Where shares move from the original offshore fund (or its wholly owned special purpose vehicle) to the resultant fund in a relocation, gains on those shares can stay outside tax, if they would not have been taxed without the relocation.
What to check: The exemption applies only where the relocation meets the conditions in Schedule VI, Sl. 10.
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Schedule VI, Sl. 10
10. Any income of the nature of Capital gains, arising or received on account of transfer of share of a company resident in India. Any non-resident or a specified fund.(a) The Capital gain is on account of transfer of shares by the resultant fund or a specified fund; and (b) such shares were transferred from the original fund, or from its wholly owned special purpose vehicle, to the resultant fund in relocation, and the capital gains on such shares were not chargeable to tax if that relocation had not taken place; and Sl. No. Income not to be included in total income Eligible persons Conditions A B C D (c) income not to be included in the total income shall be to the extent attributable to units held by non-residents (not being a permanent establishment of a non-resident in India) in such manner, as may be prescribed.
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
