Circular No. 8/2019

Clarification regarding definition of fund manager under section 9A 4 b of the income tax act 1961

What this is

Circular No. 8/2019 was issued by the Central Board of Direct Taxes on 10 May 2019. Its subject is Clarification regarding definition of fund manager under section 9A 4 b of the income tax act 1961.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Clarifies that the expression "fund manager" in section 9A(4)(b) takes in an Asset Management Company approved by the Securities and Exchange Board of India under the SEBI (Mutual Funds) Regulations, 1996. SEBI told the Board that such a company is engaged in fund management of mutual funds and is in substance a fund manager, so it is entitled to the benefit of section 9A. The circular also records that Notification No. 27/2019 dated 20 March 2019 has already brought the SEBI (Mutual Funds) Regulations, 1996 into the definition of "specified regulations" in section 9A(9)(e).

Why it was issued

Representations were received in the Board asking that an Asset Management Company approved under the SEBI (Mutual Funds) Regulations, 1996 be included for the purposes of section 9A(4)(b).

Who it reaches

SEBI registered Asset Management Companies acting for offshore funds
Eligible offshore investment funds relying on the section 9A safe harbour
Advisers structuring fund management activity onshore in India

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.9A	s.9

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

F. No: SOO/182/2018-FT & TR·V Itt'D . Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Foreign Tax & Tax Research - II
FT & TR-V Division
Circular No. -.~.-.
New Delhi, dated It>. C¥",,2..o/,
Subject: Clarification regarding definition of "Fund Manager" under Section 9A(4)(b) of
the Income-tax Act, 1961.

Representations have been received in the Board for inclusion of an Asset Management
Company (AMC) approved in accordance with Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996 for the purpose of Section of 9A(4) (b) of the Income-tax Act, 1961.

2. The matter has been examined in the Board in consultation with SEBI. SEBI has stated
that an AMC is engaged in the activity of fund management of Mutual Funds and hence is in
substance, a Fund Manager, and entitled for benefits u/s 9A of the Income-tax Act. Therefore, it
is hereby clarified that the phrase "fund manager" in Section 9A(4)(b) of the Income-tax Act
includes an AMC as approved by SEBI under the SEBI (Mutual Funds) Regulations, 1996. A
notification (No. 27/2019 dated 20th March 2019) has already been issued to include the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 in the definition of
"specified regulations" in Section 9A(9)(e) of the Income-tax Act.

To
(Su ash Jangala)
Under s ary (FT&TR-V)

(a) Revenue Secretary
(b) Chairman, Members and all other Officers of the Central Board of Direct Taxes.
(c) Commissioner (Media & Technical Policy) and Official Spokesperson, CBDT.
(d) Addl Director General of Income-tax (PR, PP & OL)
(e) ITCC Section of CBDT (3 copies)
.kf) ADG (Systems)-IV for uploading on the Departmental website.
(g) Database Cell for uploading on the IRS Officers website.
(h) Hindi cell of Department of Revenue, for Hindi translation.
(i) Guard File. !l.h .r'::=------- - ~ash Jangala)
Under secretary (FT&TR-V)

What to watch

The clarification goes to the identity of the fund manager only; the other conditions in section 9A for the fund and for the manager must still be met independently.
It rests on approval under the SEBI (Mutual Funds) Regulations, 1996, so a manager registered under some other regulation is not covered by this text.
The circular number and date are illegible in the scanned copy supplied and have been taken from the catalogue entry, so verify the citation before quoting it.
The file number is also partly garbled in the scan and has not been reproduced here.

Where you meet it

In arguing that an offshore fund does not acquire a business connection or residence in India merely because an Indian asset management company runs it, typically in a scrutiny assessment or before the transfer pricing officer.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 59/2022 [F. No. 370142/11/2022-TPL] / S.O. 2602(E) — Ministry of Finance 6 June 2022
Circular No. 12/2021 — Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic 25 June 2021
Notification No. 13/2021 [F. No. 142/15/2015-TPL]/ GSR No. 162(E) — Ministry of Finance 9 March 2021
Circular No. 1/2021 — Amount of remuneration prescribed under section 9A 3 m of the income tax act 1961 15 January 2021
Notification No. 41/2020 [F. No. 142/15/2015-TPL- Part (1)] / SO 2148(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 30 June 2020
Notification No. 27/2019 [F.No. 500/182/2018 -FT&TR - V] /SO 1420(E) — jftLVªh laö Mhö ,yö&33004@99 REGD. NO. D. L.-33004/99 20 March 2019

← Circular No. 9/2019 · Circular No. 7/2019 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.