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Investment in Alternate Investment Funds (AIF) is done in a similar manner as any other fund. The pros and cons are evaluated and compared with other investment option available to make an investment decision. AIF provides various advantages to investors. Investors also have options to select an AIF scheme from the three Categories of AIF. The tax treatment of AIFs is an important aspect of the decision making process preceding the investment in an AIF. This blog focuses on the tax treatment of AIFs and investors under the Income Tax Act of 1961[1] (“IT Act”).
The various tax treatment of AIFs as prescribed under the IT Act, 1961 has to be considered for making investments in AIF. The tax treatment of AIFs is different depending on their category. An investor has to compare the various tax treatment of AIFs to decide which category of AIF to invest in.
Also Read:Income Tax on Alternate Investment Fund (AIF)Alternate Investment Fund Category I Regulations
Ankita is an Advocate and has joined Enterslice as a Legal Researcher. Her work focuses on General Civil and Commercial laws, Corporate Taxation Laws, Labour and Employment Laws and Dispute Resolution. She is a law graduate from School of Law, University of Petroleum and Energy Studies. Prior to joining Enterslice, Ankita has the experience of practicing law in Delhi and Odisha.
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