The Securities and Exchange Board of India clarified Wednesday that banks and brokers are not liable for taxes owed by offshore funds. Tax authorities had requested custodian details in April, raising concerns about potential liability. This clarification addresses a regulatory hurdle that had delayed fund launches and slowed fresh applications.
SEBI says banks not liable for offshore fund tax dues
SEBI clarified that banks and brokers are not liable for offshore funds tax dues. The move aims to resolve concerns that slowed new fund applications lately.
Xurve View
Xurve View
SEBI issued the clarification via email following consultations with the tax department. Last month, India's federal tax authorities asked representatives of offshore funds, such as foreign banks that act as custodians, to furnish their details and seek Indian tax identification for their clients. The guidance removes uncertainty over whether custodians could be held liable for tax demands on behalf of their clients.
