AIF Fund Services

Our AIF fund services support sponsors and fund managers across the three categories of Alternative Investment Funds recognised under Regulation 3(4) of the SEBI (Alternative Investment Funds) Regulations, 2012 — Category I (venture capital, SME, social venture, infrastructure, and angel funds), Category II (private equity and debt funds not employing leverage beyond operational needs), and Category III (funds using complex or leveraged trading strategies, including hedge funds).

Because the category a fund is classified under determines both its regulatory obligations and its tax treatment, correct category selection at the structuring stage is critical. Category I and Category II AIFs benefit from a pass-through tax regime under Section 115UB of the Income-tax Act, 1961 (carried forward into the Income-tax Act, 2025 under Sections 196–197 and Schedule XXI), meaning income is taxed in investors' hands rather than at the fund level, subject to exemptions under Sections 10(23FBA)/(23FBB). Category III AIFs, by contrast, are taxed at the fund level as an Association of Persons, at slab rate or maximum marginal rate — a distinction that materially affects investor returns and should be factored into fund structuring decisions from the outset.

Our fund services span category classification and structuring advice, coordination with the fund's registered SEBI intermediary on category-specific compliance obligations, and ongoing advisory support as a fund's strategy evolves within its chosen category's regulatory boundaries.

AIF Fund Services is the end-to-end operating layer for alternative investment funds: from the moment the sponsor decides to launch a fund to the day-to-day accounting, reporting and compliance that keeps it registered and credible with investors. It sits on the SEBI (Alternative Investment Funds) Regulations 2012, which govern how the fund is registered, how it raises capital, how it reports and how it is audited.

The sponsor's job is investment. The fund's legal existence — the constitutive documents, the placement memorandum, the investor agreements, the subscription and redemption mechanics — is a parallel project that decides whether investors sign. So is the accounting layer: fund accounting is not company accounting, with NAV computation, carried interest and fee waterfalls that lenders, investors and SEBI all scrutinise.

A fund that shortcuts this operating layer pays for it in investor trust and regulatory friction. Subscription monies collected without the right documentation, NAVs that cannot be reconciled, quarterly reports filed late — each one is visible to SEBI under the AIF Regulations and to investors in their fund reports. In a market where fund managers compete on governance, the operating layer is the product.

This service is for fund sponsors, investment managers and family offices running or launching AIFs. We provide the chartered-accountant backbone — fund setup documentation, investor onboarding and certification, accounting and NAV support, audit coordination, and the full SEBI reporting calendar — so the investment manager can focus on returns while the vehicle stays compliant.