Indirect transfer provisions may tax investors in foreign funds whose value derives substantially from Indian assets, with limited carve-outs. Explanation 5 to section 9(1)(i) applies to investors in foreign funds whose shares or interests derive substantially from assets located in India, subject to the small investor carve out of Explanation 7 when investors lack management or control and hold below the participation threshold. Master feeder, nominee/distributor, listed fund and sub fund structures are addressed: investors with no control may be excluded, whereas fund level holdings that meet the substantial value test render investor interests taxable. Rule 11UB/11UC govern valuation and apportionment and reporting and withholding obligations remain operative.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Indirect transfer provisions may tax investors in foreign funds whose value derives substantially from Indian assets, with limited carve-outs.
Explanation 5 to section 9(1)(i) applies to investors in foreign funds whose shares or interests derive substantially from assets located in India, subject to the small investor carve out of Explanation 7 when investors lack management or control and hold below the participation threshold. Master feeder, nominee/distributor, listed fund and sub fund structures are addressed: investors with no control may be excluded, whereas fund level holdings that meet the substantial value test render investor interests taxable. Rule 11UB/11UC govern valuation and apportionment and reporting and withholding obligations remain operative.
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