Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
These changes impact investment funds, presumptive taxation, insurance policies, and tax exemptions in the International Financial Services Centre (IFSC).
Changes to Section 9A: Investment fund rules relaxed
Earlier, Indian residents could not invest more than 5% in an eligible investment fund, directly or indirectly. The amendment removes indirect investment from this limit, reducing compliance burdens and encouraging fund managers to relocate offshore funds. Additionally, the Central Government can now modify this condition if required.
Section 44BBD: Presumptive taxation for tech services
The new section 44BBD introduces presumptive taxation for non-residents providing technology or services to an electronics manufacturing facility in India. It deems 25% of total receipts as taxable business income.
The amendment clarifies that sections related to permanent establishments and royalty taxation will not apply to this income.
Section 10(10D): Life insurance exemption adjusted
The Finance Bill 2025 exempts life insurance proceeds issued by IFSC insurance offices from tax. The amendment corrects a previous reference from IFSC insurance intermediaries to IFSC insurance offices.
Section 10(4D): Tax exemptions for specified funds
Specified funds, including retail schemes and Exchange Traded Funds (ETFs), must now comply with IFSC regulations to qualify for tax exemptions. This ensures alignment with regulatory standards.
Section 47(viiad): Tax-neutral relocation of funds
Retail schemes and ETFs regulated under IFSC Fund Management Regulations are now classified as ‘resultant funds.’ The amendment removes the requirement that they must comply with section 10(4D), allowing easier tax-neutral relocation.
Section 10(4E): Extended exemptions for non-residents
Non-residents previously received tax exemptions on derivative transactions with Offshore Banking Units. The amendment extends this to transactions with Foreign Portfolio Investors (FPIs) in IFSC. Additionally, exemptions now cover income distribution from Over-the-Counter (OTC) derivatives.
Section 2(14): Capital asset definition expanded
The amendment includes securities held by Category I and II Alternative Investment Funds (AIFs) as capital assets, whether regulated by SEBI or IFSC authorities.
Section 158BA and block assessment changes
The concept of ‘total income’ is now replaced with ‘total undisclosed income.’ Block assessments will focus on identifying undisclosed income, ensuring that previously declared income is not reassessed. The time limit for completing block assessments is now 12 months, extendable by 30 days in specific cases.
Section 143(1): Return processing adjustments
Tax authorities can now check inconsistencies between the current and previous year’s returns while processing income tax filings. Specific inconsistencies will be prescribed later.