Govt proposes to ease tax relief conditions for offshore funds

PTI New Delhi

To strengthen India's position as a global fund management hub, the Government has proposed to substantially relax eligibility conditions for an Eligible Investment Fund managed from India to avail tax exemption on its global income.

As per the Taxation and Other Laws (Amendment) Bill, 2026, offshore funds would no longer need to satisfy conditions such as a minimum investor threshold of 25 members, a maximum 10% participation interest for a single investor, a restriction on investing more than 25% of the corpus in a single entity, restrictions on investments in associate entities, and a minimum monthly average corpus requirement of ₹100 crore. 

The Government has circulated the Bill among members of Parliament, and Finance Minister Nirmala Sitharaman is expected to introduce it in the Lok Sabha soon. 

The proposed amendments also seek to remove separate exemption conditions for funds operating from the International Financial Services Centre. This would eliminate existing ambiguity between IFSC and non-offshore funds while introducing a uniform eligibility framework to ensure identical conditions apply to all eligible investment funds managed from India.