Narayan Murthy Committee's First Report On AIF Policy: A Mixture Of Immediate Fixes And Long Term Recommendations

In 2015, SEBI had set up the standing Alternative Investment Policy Advisory Committee ("AIPAC") under the chairmanship of Mr. Narayan Murthy. AIPAC released its first report on January 20, 2015 ("Report").

The Report lays down the roadmap for immediate improvements and long term progress of the alternative investment fund industry. The recommendations primarily deal with tax and regulatory reforms.

AIPAC suggests amendments to the Income Tax Act, 1961 to align the legislation with the commercial realities and the potential of private equity and venture capital sector. Major recommendations include:-

• Removal of withholding tax for exempt investors and exempt streams of income;