Rule 51 adds a condition for section 70(2) [Table: Sl. No. 5, C(a)(A)(iv)] where a capital asset is transferred to a Category III Alternative Investment Fund as the resultant fund: residents' participation in the original fund must not exceed 5% of its corpus at the time of transfer.
51
Rules 2026 · Rule 51
Original fund / IFSC relocation
Rules 49-59
The condition (sub-rule 1). Where the resultant fund is a Category III Alternative Investment Fund, the original fund must satisfy the condition that the aggregate participation or investment in it, directly or indirectly, by persons resident in India does not exceed 5% of the corpus of the fund at the time of the transfer.
Definitions (sub-rule 2). "Original fund" and "resultant fund" have the meanings in section 70(2) [Table: Sl. No. 5, C(a) and (c)].