Fund raising is primary requirement to channelize progressive activities in the economy, to drive growth. AIFs as an alternative investment option formed as privately pooled investment vehicle invite capital from eligible domestic and foreign investors for investing with well-defined investment policies for the investors benefit.
This article articulates broader aspects around tax considerations that require attention in the 2023 Budget that could act as a catalyst for the AIFs contributing towards the growth of Indian economy.ġ.1.
Essentially, tax treatments of the AIFs also have a pivotal role while investors evaluate the decision to invest in an AIF. This is backed by sovereign funds aimed to provide thrust on the capital-intensive infrastructure projects like toll roads, solar and wind power facing fund raising constraints through listed markets. The interest of the investors in social agenda followed by optimizing returns has resulted in the AIF industry to outshine. The concept of AIF was introduced a decade ago, since then, it has gained traction amongst wide group of investors managing a commitment of over INR 6,940 billion invested across sectors contribution consistently to the economic trajectory of India. Distinct from capital markets, investments in AIFs are illiquid, though for unconventional investors, from a long-term investment perspective, investments in AIFs offer numerous advantages. The decision of investment in an alternative investment fund ('AIF') revolves around sophisticated investors who are capable of analysing and comparing their investment with other investment options.
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