Remuneration to be paid to an eligible Fund Manager under section 9A of the Income-tax Act, 1961

Last updated: 29 May 2020

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This notification introduces amendments to the Income-tax Rules, 1962, specifically concerning the remuneration paid to eligible Fund Managers under Section 9A of the Income-tax Act, 1961. The rules clarify that certain provisions (sub-rules 5 to 10) will not apply from April 1st, 2019. For Category-I foreign portfolio investors, the remuneration is calculated as 0.10% of the assets under management.

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 27th May, 2020

INCOME-TAX

G.S.R.315(E).—In exercise of the powers conferred by section 295 read with clause (m) of sub-section (3) of section 9A 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 be called the Income-tax (10th Amendment) Rules, 2020.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), -

(a) in rule 10V,-

(i) after sub-rule (10), the following shall be inserted, namely: -

“(11) The provisions of sub-rule (5) to sub-rule (10) shall not apply on or after the 1st day of April, 2019.

(12) the amount of remuneration to be paid by the fund to a fund manager, referred to in clause (m) of sub-section (3) of section 9A, shall be calculated in the following manner, namely: -

(i) In case where the fund is Category-I foreign portfolio investor referred to in item (i), item (ii) or item (iii), and subitem III of item (iv) of clause (a) of regulation 5 of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), the amount of remuneration shall be 0.10 per cent of the asset under management.

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FAQ :

This notification amends the Income-tax Rules, 1962, to further define the remuneration payable to an eligible Fund Manager under Section 9A of the Income-tax Act, 1961.

The notification states that the provisions of sub-rules (5) to (10) of rule 10V shall not apply on or after the 1st day of April, 2019.

For Category-I foreign portfolio investors, the remuneration paid to the fund manager is calculated as 0.10 per cent of the assets under management.

Category-I foreign portfolio investors are defined by reference to items (i), (ii), or (iii), and sub-item III of item (iv) of clause (a) of regulation 5 of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019.