Government proposes sweeping tax rule changes to attract offshore funds - what it means
The Bill, which has been circulated among Members of Parliament, is expected to be introduced in the Lok Sabha shortly by Finance Minister Nirmala Sitharaman.
The Indian government has proposed sweeping tax rule changes to make the country a more attractive destination for offshore funds. Under the Taxation and Other Laws (Amendment) Bill, 2026, offshore funds seeking tax exemption on their global income will no longer have to meet stringent eligibility norms, such as maintaining a minimum corpus of Rs 100 crore, limiting any single investor's participation to 10%, or avoiding investments in associate entities.
These proposed changes aim to create a common eligibility framework for all investment funds managed from India, including those operating from the International Financial Services Centre (IFSC). The move is expected to significantly enhance the attractiveness of India's onshore fund management ecosystem for offshore funds and facilitate greater relocation of offshore fund management activities to India.
Additionally, the Bill seeks to replace an Ordinance issued in June, which granted tax exemption on interest income and capital gains earned by foreign portfolio investors from investments in government securities.
Brief written by urgent.news from Times of India's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
