Understanding the Regulatory Framework for AIFs in India

Thu, 12 Dec 2024 09:35:06 +0000

Alternative Investment Funds (AIFs) are a popular investment vehicle in India, offering opportunities in non-traditional asset classes like venture capital, private equity, and hedge funds. SEBI regulates AIFs through detailed frameworks ensuring transparency, investor protection, and operational guidelines. AIFs are categorized into three types, each with its own set of operational restrictions, reporting requirements, and tax implications. Category I and II AIFs offer pass-through taxation, while Category III AIFs are taxed at the fund level. Understanding these regulations is essential for both fund managers and investors looking to navigate the AIF landscape.