Amendment of rule 157 of the Income tax Rules, 2026 to align the definition of the specified fund with rule 114AAB of the Income tax Rules, 1962
The Central Board of Direct Taxes, through Notification No. 94/2026-Income Tax dated 21 July 2026, has issued the Income-tax (Second Amendment) Rules, 2026 under section 533 read with section 262 of the Income-tax Act, 2025. The rules come into force on the date of their publication in the Official Gazette. The amendment substitutes clause (c) of sub-rule (5) of rule 157 of the Income-tax Rules, 2026 to redefine the term “specified fund”. The revised definition includes any fund established or incorporated in India as a trust, company, limited liability partnership or body corporate that has been granted registration as a Category I or Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, or the International Financial Services Centres Authority (Fund Management) Regulations, 2022 and located in an International Financial Services Centre. It also includes any fund referred to in Schedule VI [Note 1(g)] to the Income-tax Act, 2025.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 94/2026-Income Tax | Dated: 21st July, 2026
G.S.R. 646(E).— In exercise of the powers conferred by section 533 read with section 262 of the Income-tax Act, 2025 (30 of 2025), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 2026, namely: ___
1. (1) These rules may be called the Income-tax (Second Amendment) Rules, 2026.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 2026, in rule 157, in sub-rule (5), for clause (c), the following clause shall be substituted, namely: —
‘(c) “specified fund” means —
(i) any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or Category II Alternative Investment Fund and is regulated under —
(A) the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or
(B) the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019) and which is located in any International Financial Services Centre; or
(ii) any fund which has been referred to in Schedule VI [Note 1(g)] to the Act;’.
[No. 94/2026/F. No. 370142/24/2026-TPL]
ROHIT SINGH, Uunder Secy.
Note: The Income-tax Rules, 2026 were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide notification number G.S.R. 198(E), dated the 20th March, 2026 and were last amended vide notification number G.S.R. 241(E), dated the 31st March, 2026.
