Government proposes to ease tax relief conditions for offshore funds
The Indian government has proposed relaxing tax eligibility conditions for offshore investment funds managed from India. The move aims to position India as a global fund management hub by removing restrictive thresholds for investor participation and corpus size.
Why it matters
This policy shift is intended to attract foreign capital and encourage the relocation of global fund management operations to India.
To strengthen India's position as a global fund management hub, the Government has proposed to substantially relax the eligibility conditions for an Eligible Investment Fund (EIF) managed from India to avail tax exemption on its global income.
As per the Taxation and Other Laws (Amendment) Bill, 2026, to avail tax exemption on global income, offshore funds would no longer be required to satisfy the conditions like minimum investor threshold of 25 members, maximum 10% participation interest for a single investor, restriction on investing more than 25% of the corpus in a single entity, restriction on investments in associate entities and minimum monthly average corpus requirement of ₹100 crore.
The Bill, which has been circulated by the Government among the members of Parliament, is expected to be introduced by Finance Minister Nirmala Sitharaman in the Lok Sabha soon.
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