Fund Management Activity Fund Management Activity When Not to Constitute Business Connection as per Section 9A—Simplification by Finance Bill, 2025

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The Tax Publishers Finance Bill, 2025--Fund Management Activity Fund Management Activity When Not to Constitute Business Connection as per Section 9A--Simplification by Finance Bill, 2025 CA. Nisha Bhandari Section 9A provides that in certain cases fund management activity shall not constitute business connection in India. The Finance Bill, 2025 has proposed certain amendments in section 9A so as to simplify the regime provided in this section. 1. Fund Management Activity not to constitute business connection in certain cases Section 9A(1) provides that notwithstanding anything contained in sub-section (1) of section 9 and subject to the provisions of this section, in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund. 2. Fund manager based in India not to affect investment fund Section 9A(2) provides that notwithstanding anything contained in section 6, an eligible investment fund shall not be said to be resident in India for the purpose of that section merely because the eligible fund manager, undertaking fund management activities on its behalf, is situated in India. 3. Eligible investment fund for purpose of sub-section (1) of section 9A Sub-section (3) of section 9A provides that the eligible investment fund referred to in sub-section (1), means a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit and fulfils the following conditions, namely:-- (a) the fund is not a person resident in India; (b) the fund is a resident of a country or a specified territory with which an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A has been entered into or is established or incorporated or registered in a country or a specified territory notified by the Central Government in this behalf; SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2025--Fund Management Activity

Fund Management Activity When Not to Constitute Business Connection as per Section 9A--Simplification by Finance Bill, 2025

CA. Nisha Bhandari

Section 9A provides that in certain cases fund management activity shall not constitute business connection in India. The Finance Bill, 2025 has proposed certain amendments in section 9A so as to simplify the regime provided in this section.

1. Fund Management Activity not to constitute business connection in certain cases

Section 9A(1) provides that notwithstanding anything contained in sub-section (1) of section 9 and subject to the provisions of this section, in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund.

2. Fund manager based in India not to affect investment fund

Section 9A(2) provides that notwithstanding anything contained in section 6, an eligible investment fund shall not be said to be resident in India for the purpose of that section merely because the eligible fund manager, undertaking fund management activities on its behalf, is situated in India.

3. Eligible investment fund for purpose of sub-section (1) of section 9A

Sub-section (3) of section 9A provides that the eligible investment fund referred to in sub-section (1), means a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit and fulfils the following conditions, namely:--

(a) the fund is not a person resident in India;

(b) the fund is a resident of a country or a specified territory with which an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A has been entered into or is established or incorporated or registered in a country or a specified territory notified by the Central Government in this behalf;