INDIA Law and Practice Contributed by: Tejesh Chitlangi, Sushreet Pattanayak, Pooja Mehta and Anita Jain, IC Universal Legal
Individuals and Hindu Undivided Families (HUF) whose total income excluding long-term capi - tal gains falls below the threshold of income, chargeable to tax, this shortfall must be deduct - ed from the long-term capital gain and only the balance of the gain will be chargeable to tax. Any loss arising from the sale of units can be deducted from the other capital gains of the investor; however, the deduction will only be made from the capital gains, and any capital loss must be carried forward separately to be offset 4. Legal, Regulatory or Tax Changes 4.1 Recent Developments and Proposals for Reform Domestic AIFs have seen various regulatory changes over the last few years. The SEBI has implemented several measures to strengthen AIF governance, including standardising PPMs, requiring merchant banker sign-off on PPM dis - closures, issuing detailed valuation guidelines, and imposing specific due diligence require - ments to prevent regulatory arbitrage. Recent regulatory amendments aim to curb the misuse of AIFs for achieving “qualified buyer” or “qualified institutional buyer” status without meeting independent eligibility criteria. Addi - tionally, AIFs with significant involvement of RBI regulated entities are subject to enhanced scrutiny to address concerns over evergreen - ing of stressed loans and circumvention of RBI regulations. The SEBI has also imposed stricter due diligence measures on Domestic AIFs with against capital gains in the next year. Retail Schemes Under GIFT Funds See 2.6 Tax Regime .
majority investment from countries sharing a land border with India. The SEBI has also introduced a certification for managers’ key investment team members, replacing the previous financial services expe - rience requirement. This change is expected to reduce entry barriers for new arrivals. The SEBI also addressed the long-standing issue of unliquidated investments at the end of the ten - ures of Domestic AIFs by introducing a frame - work for extensions (continuation funds) and in specie distributions. Fund managers remain bullish on the Indian alternatives market, since the SEBI’s increased scrutiny is driven by a belief that stringent adher - ence to regulatory obligations and standards will foster trust, enabling the introduction of more relaxed regulations and making it easier to do business for Domestic AIFs. The SEBI has also recently notified two impor - tant updates with respect to mutual funds. Firstly, it has introduced the “Specialized Invest - ment Fund”, a new product with a higher risk threshold which is intended for investors with a higher appetite for risk and offers greater flex - ibility and a higher ticket size. The SEBI has also introduced a simplified regime for index funds, MF Lite, where the AMCs will have leaner regu - latory compliance requirements based on lower risk and a simplified product structure. The two amendments also reflect the SEBI’s intention to balance its own regulatory ambit with evolving market needs. In recent years, GIFT City has also emerged as a prominent international financial services hub. Its ranking improvement in the Global Financial Centres Index 2024 reflects its growing appeal, and the Indian government has expressed its
228 CHAMBERS.COM
Powered by FlippingBook