The income tax (I-T) department has further relaxed conditions for offshore funds from 121 countries to encourage overseas fund managers shift base to India. The move — aimed at funds run by Citi, Morgan Stanley and JP Morgan, among others — would cover Mauritius and Singapore, but not Hong Kong. The 2015-16 Budget had made some exemptions by amending the permanent establishment (PE) norms.
Mere presence of a fund manager in India did not make it a PE of the offshore fund. This exempted these fund managers from corporate tax even if located in India. They only had to pay …