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MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 8th July, 2022 G.S.R. 524(E).In exercise of the powers conferred by sub-clause (iv) of clause (a) of Explanation to clause (viiad) of section 47 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: - 1. Short title and commencement. (1) These rules may
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FAQ :
Rule 21AL sets out the conditions that an 'original fund' must meet when transferring a capital asset to a 'resultant fund', specifically a Category III Alternative Investment Fund (AIF).
The rule came into force from the date of its publication in the Official Gazette, which was 8th July 2022.
The main condition is that the total investment or participation in the original fund, directly or indirectly, by Indian resident individuals or entities cannot exceed five per cent of the fund's corpus at the time of the transfer.
A 'resultant fund' refers to a Category III Alternative Investment Fund (AIF) to which a capital asset is transferred from an 'original fund'.
The definitions for 'original fund' and 'resultant fund' are provided in the Explanation to clause (viiac) and clause (viiad) of section 47 of the Income-tax Act, respectively.
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