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New Indian permanent establishment rules for offshore funds will become effective from April 1, the Central Board of Direct Taxes has confirmed.

The rules were first proposed in Budget 2015 to encourage offshore fund managers to relocate to India.

The 2015 Finance Bill inserted a new section 9A in the Income Tax Act to provide that, subject to certain conditions, the mere presence of a fund manager in India will not create an Indian PE.

A press release issued on March 16, titled "Rules in respect of fund manager regime under section 9A of the Income-tax Act, 1961-reg," set out the applicable rules to benefit from the concession.

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Published on our website on Mar.21, 2016