Corpzo Clarifies Taxation on Income Received from AIF Category III for InvestorsAIF Category III investments are growing at a record pace, but many investors are not fully aware of how their returns will be taxed," said a Corpzo spokesperson.
By: CorpZo Alternative Investment Funds (AIFs) are classified into three categories by SEBI, with Category III funds primarily investing in complex strategies such as hedge funds, derivatives, and listed or unlisted equities. Unlike Category I and II AIFs, where pass-through taxation applies, the income received from AIF Category III is taxed directly at the fund level. This distinction often creates confusion for investors, as different income streams—such as business income, capital gains, or interest income—are taxed differently. According to Corpzo experts, the income received from AIF Category III is treated as business income in most cases and taxed at the maximum marginal rate, which can significantly impact post-tax returns. For non-resident investors, withholding tax and double taxation treaties further complicate the scenario. "AIF Category III investments are growing at a record pace, but many investors are not fully aware of how their returns will be taxed," said a Corpzo spokesperson. "Our advisory team provides detailed guidance on structuring investments, understanding tax liabilities, and ensuring compliance with SEBI and Income Tax regulations." Corpzo's services cover tax advisory, fund structuring, compliance support, and investor guidance to ensure clarity and efficiency in handling the income received from AIF Category III. https://www.corpzo.com/ 👉 For expert assistance on taxation and compliance related to income received from AIF Category III, visit www.corpzo.com . End
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