Our fund manager is being set up in GIFT City rather than in Mumbai. Does that make any difference to the section 9A conditions?
It can, but only through a notification. Section 9A(8A) empowers the Central Government, by notification in the Official Gazette, to specify that any one or more of the conditions in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as the notification specifies, in the case of an eligible investment fund and its eligible fund manager where the manager is located in an International Financial Services Centre and has commenced its operations on or before 31 March 2030. The relaxation is not automatic: without a notification covering the condition in question, every condition continues to apply in full.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2025-04-01, reported as Section 9A(8A) of the Income-tax Act, 1961, as amended up to 2025; the figure '2030' substituted for '2024' by Act No. 7 of 2025, with effect from 1 April 2025. It bears on section 9A, section 9A(8A), section 9A(3), section 9A(4), section 80LA of the Income Tax Act 1961, in Residence & Treaty Benefit and How Tax Law Is Read matters.
Two things about this sub-section are commonly got wrong. The first is its nature: it is an enabling power, not a relaxation. A fund manager who sets up in an IFSC does not thereby become free of the twenty-five member floor or the corpus floor; he becomes eligible to benefit from whatever the Central Government has actually notified. Any advice that a condition is disapplied has to be traced to a notification under this sub-section, and this entry does not state that any such notification exists. The second is the date, which has moved twice and is the kind of figure that goes stale in a note. The successive texts of the section show the movement: the earlier ones print '31st day of March, 2024', the current one prints '31st day of March, 2030', and the footnote records that the earlier figure was substituted by Act No. 7 of 2025 with effect from 1 April 2025. Note the third feature: the commencement-of-operations test attaches to the FUND MANAGER, not to the fund, and the definition of an International Financial Services Centre is borrowed from clause (a) of the Explanation to section 80LA, which in turn takes it from clause (q) of section 2 of the Special Economic Zones Act 2005.
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Not a case. The sub-section operates on two sets of conditions: clauses (a) to (m) of section 9A(3), which define the eligible investment fund, and clauses (a) to (d) of section 9A(4), which define the eligible fund manager. It applies where the eligible fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA — a definition which assigns to that expression the same meaning as in clause (q) of section 2 of the Special Economic Zones Act 2005 — and where that fund manager has commenced its operations on or before 31 March 2030. Earlier texts of the sub-section print it in the same words save that the figure is '31st day of March, 2024' in place of '31st day of March, 2030'.
The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as may be specified in the notification, in the case of an eligible investment fund and its eligible fund manager, if that fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA and has commenced its operations on or before 31 March 2030. The relief therefore depends on the terms of a notification and does not operate of its own force. A caution on the scope of the power. Clause 5(b)(i) of the Finance Bill 2025 directs that, in sub-section (8A), after the words, brackets and letters "in clauses (a) to (m)", the brackets, words and letter "[other than clause (c)]" shall be inserted; and the Memorandum explaining that Bill states that "the condition at clause (c) of sub-section (3) of section 9A shall not be modified for any eligible investment fund and its eligible fund manager". The current text of the section does not print those words. If they are in the enacted Act, the notification power in this sub-section does NOT extend to the five per cent resident-participation condition in clause (c) at all.
Not a judicial route. The conditions in section 9A(3) and (4) are addressed to the risk that an offshore fund managed from India is in substance an Indian business; where the manager is inside an International Financial Services Centre, that risk is already addressed by the regulatory perimeter of the Centre itself, and several of the conditions — the member count, the concentration caps, the corpus floor — serve little purpose there. Rather than write a separate set of conditions for IFSC managers into the section, Parliament left the choice of which conditions to disapply or modify to delegated legislation, with a sunset tied to the date the manager commences operations, so that the relief functions as an incentive to establish in the Centre within a fixed window rather than as a permanent parallel regime. The successive substitutions of that date, recorded in the Department's footnote, are extensions of that window.
The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of sub-section (3) or clauses (a) to (d) of sub-section (4) shall not apply or shall apply with such modifications, as may be specified in such notification, in case of an eligible investment fund and its eligible fund manager, if such fund manager is located in an International Financial Services Centre, as defined in clause (a) of the Explanation to section 80LA, and has commenced its operations on or before the 31st day of March, 2030.
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Handle my notice → Ask a CA on WhatsAppIt can, but only through a notification. Section 9A(8A) empowers the Central Government, by notification in the Official Gazette, to specify that any one or more of the conditions in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as the notification specifies, in the case of an eligible investment fund and its eligible fund manager where the manager is located in an International Financial Services Centre and has commenced its operations on or before 31 March 2030. The relaxation is not automatic: without a notification covering the condition in question, every condition continues to apply in full. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 9A, section 9A(8A), section 9A(3), section 9A(4), section 80LA of the Income Tax Act 1961. It is reported as Section 9A(8A) of the Income-tax Act, 1961, as amended up to 2025; the figure '2030' substituted for '2024' by Act No. 7 of 2025, with effect from 1 April 2025. Two things about this sub-section are commonly got wrong. The first is its nature: it is an enabling power, not a relaxation. A fund manager who sets up in an IFSC does not thereby become free of the twenty-five member floor or the corpus floor; he becomes eligible to benefit from whatever the Central Government has actually notified. Any advice that a condition is disapplied has to be traced to a notification under this sub-section, and this entry does not state that any such notification exists. The second is the date, which has moved twice and is the kind of figure that goes stale in a note. The successive texts of the section show the movement: the earlier ones print '31st day of March, 2024', the current one prints '31st day of March, 2030', and the footnote records that the earlier figure was substituted by Act No. 7 of 2025 with effect from 1 April 2025. Note the third feature: the commencement-of-operations test attaches to the FUND MANAGER, not to the fund, and the definition of an International Financial Services Centre is borrowed from clause (a) of the Explanation to section 80LA, which in turn takes it from clause (q) of section 2 of the Special Economic Zones Act 2005. If it applies to you, the first step is this: Before relying on any notification under this sub-section to relax the five per cent resident-participation condition in section 9A(3)(c), check the enacted text of section 9A(8A) against the Gazette: the Finance Bill 2025 directs that clause (c) be carved OUT of the power, and the current text of the section does not show that carve-out.
Not a case. The sub-section operates on two sets of conditions: clauses (a) to (m) of section 9A(3), which define the eligible investment fund, and clauses (a) to (d) of section 9A(4), which define the eligible fund manager. It applies where the eligible fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA — a definition which assigns to that expression the same meaning as in clause (q) of section 2 of the Special Economic Zones Act 2005 — and where that fund manager has commenced its operations on or before 31 March 2030. Earlier texts of the sub-section print it in the same words save that the figure is '31st day of March, 2024' in place of '31st day of March, 2030'. The matter was decided on 2025-04-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as may be specified in the notification, in the case of an eligible investment fund and its eligible fund manager, if that fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA and has commenced its operations on or before 31 March 2030. The relief therefore depends on the terms of a notification and does not operate of its own force. A caution on the scope of the power. Clause 5(b)(i) of the Finance Bill 2025 directs that, in sub-section (8A), after the words, brackets and letters "in clauses (a) to (m)", the brackets, words and letter "[other than clause (c)]" shall be inserted; and the Memorandum explaining that Bill states that "the condition at clause (c) of sub-section (3) of section 9A shall not be modified for any eligible investment fund and its eligible fund manager". The current text of the section does not print those words. If they are in the enacted Act, the notification power in this sub-section does NOT extend to the five per cent resident-participation condition in clause (c) at all.
Not a judicial route. The conditions in section 9A(3) and (4) are addressed to the risk that an offshore fund managed from India is in substance an Indian business; where the manager is inside an International Financial Services Centre, that risk is already addressed by the regulatory perimeter of the Centre itself, and several of the conditions — the member count, the concentration caps, the corpus floor — serve little purpose there. Rather than write a separate set of conditions for IFSC managers into the section, Parliament left the choice of which conditions to disapply or modify to delegated legislation, with a sunset tied to the date the manager commences operations, so that the relief functions as an incentive to establish in the Centre within a fixed window rather than as a permanent parallel regime. The successive substitutions of that date, recorded in the Department's footnote, are extensions of that window. In the words reproduced by the source cited on this page: "The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of sub-section (3) or clauses (a) to (d) of sub-section (4) shall not apply or shall apply with such modifications, as may be specified in such notification, in case of an eligible investment fund and its eligible fund manager, if such fund manager is located in an International Financial Services Centre, as defined in clause (a) of the Explanation to section 80LA, and has commenced its operations on or before the 31st day of March, 2030."
It was decided by the CBDT Circulars & Instructions on 2025-04-01 and is reported as Section 9A(8A) of the Income-tax Act, 1961, as amended up to 2025; the figure '2030' substituted for '2024' by Act No. 7 of 2025, with effect from 1 April 2025. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 9A, section 9A(8A), section 9A(3), section 9A(4), section 80LA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as may be specified in the notification, in the case of an eligible investment fund and its eligible fund manager, if that fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA and has commenced its operations on or before 31 March 2030. The relief therefore depends on the terms of a notification and does not operate of its own force. A caution on the scope of the power. Clause 5(b)(i) of the Finance Bill 2025 directs that, in sub-section (8A), after the words, brackets and letters "in clauses (a) to (m)", the brackets, words and letter "[other than clause (c)]" shall be inserted; and the Memorandum explaining that Bill states that "the condition at clause (c) of sub-section (3) of section 9A shall not be modified for any eligible investment fund and its eligible fund manager". The current text of the section does not print those words. If they are in the enacted Act, the notification power in this sub-section does NOT extend to the five per cent resident-participation condition in clause (c) at all. It arises in Residence & Treaty Benefit and How Tax Law Is Read matters, on section 9A, section 9A(8A), section 9A(3), section 9A(4), section 80LA of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Do not advise that any section 9A(3) or 9A(4) condition is relaxed for an IFSC-based manager unless you can produce the notification under section 9A(8A) that says so, and can show it covers the specific condition in issue. Fix and document the date on which the fund manager commenced operations in the IFSC — the sub-section requires that it be on or before 31 March 2030, and the test is on the manager, not the fund. Confirm the manager is located in an International Financial Services Centre within clause (a) of the Explanation to section 80LA, which adopts the meaning in clause (q) of section 2 of the Special Economic Zones Act 2005. Where a note or opinion written before 1 April 2025 states an earlier cut-off, correct it: the current text of the section prints 31 March 2030 and its footnote records the substitution by Act No. 7 of 2025 with effect from 1 April 2025. Remember that a notification under this sub-section can also make a condition apply WITH MODIFICATIONS rather than disapply it, so read any notification for its modified form of the condition, not merely for the fact of relief.
Still good law. The sub-section has been checked in the current text of section 9A and separately in two earlier texts, which print an identical sub-section save that the date is 31 March 2024; that corroborates both the wording and the fact of the amendment. The footnote records 'Sub. for "2024" by Act No. 7 of 2025, w.e.f. 1-4-2025'. Whether any notification has been issued under this sub-section is not established here, and no judicial decision on it is recorded. The substitution of "2030" for "2024" is confirmed on an independent route: clause 5(b)(ii) of the Finance Bill 2025. The SAME clause of that Bill, at 5(b)(i), also directs the insertion of "[other than clause (c)]" after "in clauses (a) to (m)", and the Memorandum explaining the Bill states the policy that clause (c) is not to be modified for any fund. Those words do not appear in the current text of the section, which was checked twice. The Finance Act 2025 as enacted is not available here, so this conflict is unresolved. Read it with the conflict recorded in the companion entry on section 9A(3)(c) — the two are alternative drafting routes to the same policy, and it is possible that the Bill was amended at passage, but that is inference and not verification, and a fund manager should not rely on a relaxation of clause (c) until the enacted words are checked. Until the enacted words are settled, treat every condition in section 9A(3) and section 9A(4) as applying in full to a fund manager located in an International Financial Services Centre. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This is a statutory entry, not a decision, and it asserts no bench and no holding. The decided_on value, 1 April 2025, is the commencement date the footnote to the section gives for the current form of this sub-section — 'Sub. for "2024" by Act No. 7 of 2025, w.e.f. 1-4-2025' — and not a decision date. That footnote gives only the Act number and not the popular name of the amending Act, and nothing here goes behind it, so the Act is named only as Act No. 7 of 2025. The date on which section 9A(8A) was first inserted is not established here. Nor is it established whether any notification has in fact been issued under section 9A(8A), and nothing in this entry should be read as saying that one has — which matters, because without a notification the sub-section relaxes nothing. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of section 9A(3) or clauses (a) to (d) of section 9A(4) shall not apply, or shall apply with such modifications as may be specified in the notification, in the case of an eligible investment fund and its eligible fund manager, if that fund manager is located in an International Financial Services Centre as defined in clause (a) of the Explanation to section 80LA and has commenced its operations on or before 31 March 2030. The relief therefore depends on the terms of a notification and does not operate of its own force. A caution on the scope of the power. Clause 5(b)(i) of the Finance Bill 2025 directs that, in sub-section (8A), after the words, brackets and letters "in clauses (a) to (m)", the brackets, words and letter "[other than clause (c)]" shall be inserted; and the Memorandum explaining that Bill states that "the condition at clause (c) of sub-section (3) of section 9A shall not be modified for any eligible investment fund and its eligible fund manager". The current text of the section does not print those words. If they are in the enacted Act, the notification power in this sub-section does NOT extend to the five per cent resident-participation condition in clause (c) at all.
TaxSphere, “Statutory position — section 9A(8A): the conditions can be switched off for a fund manager located in an IFSC, if he commenced operations by 31 March 2030”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-9a-8a-ifsc-fund-manager-relaxation-31-march-2030/ (validity last checked 2026-09-08)
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