S. Jaykishan

Chartered Accountants

Income from Alternate Investment Fund to be taxed at 30%

Income from Alternate Investment Fund to be taxed at 30%

The income of Alternative Investment Funds (AIF) shall be taxed at the rate of 30 per cent. Such funds basically pool in money from domestic and overseas investors and invest on the basis of a pre-determined policy. The Central Board of Direct taxes was requested to clarify whether the income of such funds would be taxable in the hands of investors (contributors to the fund) or the trustees of the fund (who will be representing investors and known as Representative Assessee). The Board vide its Circular No 13/2014 dated 28.07.2014 clarified that “In a situation where the trust deed either does not name the investors, or does not specify the beneficial interest, the entire income of the fund shall be liable to be taxed at the Maximum Marginal Rate of income tax in the hands of the trustees of such AIFs in their capacity as representative assessee.”