Rule 10VA

Rule 10VA — the law in short

What the courts have decided on section Rule 10VA, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — section 9A(4) and rule 10V: who counts as an eligible fund manager, and the minimum fee the fund must pay him CBDT Circulars & InstructionsCuts both ways
  I am setting up an India-based manager for an offshore fund. What does the manager himself have to satisfy, and is there a floor on the fee the fund must pay him?
  Section 9A(4) defines the eligible fund manager as a person engaged in the activity of fund management who satisfies four conditions: he is not an employee of the fund or a connected person of the fund; he is registered as a fund manager or an investment advisor in accordance with the specified regulations; he is acting in the ordinary course of his business as a fund manager; and he, along with his connected persons, is not entitled, directly or indirectly, to more than twenty per cent of the profits accruing or arising to the fund from the transactions carried out by the fund through him. Separately, condition (m) of section 9A(3) requires the fund's remuneration to him to be not less than a prescribed amount, and rule 10V(12) prescribes that amount.
• Statutory position — rule 10VA: the optional CBDT approval that locks in a fund's section 9A eligibility CBDT Circulars & InstructionsCuts both ways
  Is there any way to get certainty on a fund's section 9A eligibility in advance, instead of arguing it years later on assessment?
  Yes, and it is optional. Rule 10VA(1) provides that an investment fund may at its option seek the approval of the Board regarding its eligibility for the purposes of section 9A. The application is made in writing, with relevant documents and evidence, to the Member of the CBDT having supervision and control over the Foreign Tax and Tax Research Division, three months before the beginning of the previous year for which approval is sought, and the Board must dispose of it within sixty days from the end of the month in which it was made.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.