Investments by foreign individuals with no family connections to India are limited by requirements to obtain a tax identification number and annual tax filings. Another option for foreigners who want to access the growing Indian market is to invest in an offshore feeder fund. Such funds can accept investments in dollars and route the money to India for you.
A Feeder Fund is a fund in an offshore jurisdiction that provides a vehicle for investors to invest in India. This is generally less cumbersome for the investor.
An AIF is a privately pooled investment vehicle which can comprise Indian and foreign investors. The resources are pooled in the form of a trust and the funds are used for investing in a defined asset class and strategy.
Long term capital gains tax rates are set by the government from time to time. Currently, the LTCG tax rate is 10%.
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