Delhi HC Relaxes Tax Norms for Category III AIFs; CBDT Circular Can’t Override SEBI Norms

Equity Intelligence AIF Trust Vs Central Board of Direct Taxes & Anr. (Delhi High Court) In a significant judgment that could shape the future of tax treatment for India’s hedge funds, the Delhi High Court has read down a 2014 circular issued by the Central Board of Direct Taxes (CBDT), offering long awaited relief to Category III Alternative Investment Funds (AIFs). These funds, known for their complex investment strategies including leverage, short selling, and hedging, had long suffered from a lack of tax clarity due to conflicting interpretations of the circular. While courts in Karn...