RETAIL FUNDS IN GIFT CITY: WHAT INVESTORS MUST KNOW ABOUT TAX IMPLICATIONS

Find out if the trust is specific or discretionary—it will decide who pays tax and at what rate

- GAUTAM NAYAK

A new global gateway has opened for Indian retail investors. A GIFT City-based subsidiary of an Indian mutual fund has launched the country's first open-ended retail fund under the International Financial Services Centres Authority (IFSCA) regulations, marking a key milestone in outbound investment access.

While this opens up a new route for resident Indian investors to gain exposure to global equities, the absence of specific tax provisions for such GIFT City-based retail funds makes it essential to understand how both the fund structure and its investors will be taxed under Indian law.