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AIF & SEBI Lifecycle · Step 1 of 4

1SEBI Registration›
2PPM & LPA Drafting›
3Ongoing Compliance›
4Investor Tax Planning
Audit & Assurancevia SEBI Intermediary Portal (intermediary.sebi.gov.in)

SEBI AIF Registration — Category I, II & III (Form A, Investment Manager Form B)

SEBI registration for Alternative Investment Funds (AIF) — Form A application for fund registration under SEBI (AIF) Regulations, 2012, Investment Manager eligibility and net worth certificate, minimum corpus of ₹20 crore, Category I/II/III classification, and SEBI correspondence through grant of registration.

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STARTING FROM₹74,999
TYPICAL TIMELINE60 days
DOCS REQUIRED8 documents
APPLICABLE TOCompany

Regulatory Framework

SEBI (Alternative Investment Funds) Regulations, 2012: Regulation 3 (registration), Regulation 4 (Form A/B). Cat I/II: tax pass-through under Section 10(23FB) ITA 1961. Cat III: entity-level taxation; leverage permitted. Minimum corpus: ₹20 crore (₹10 crore angel funds). Minimum investor commitment: ₹1 crore (₹25 lakh for employees/directors). SEBI Circular SEBI/HO/AFD-1/PoD/P/CIR/2023/130: Investment Manager net worth — Cat I/II: ₹5 crore; Cat III: higher of ₹5 crore or 0.25% AUM. Section 10(23FB) Income Tax Act, 1961: tax pass-through for Category I and II AIFs. FEMA Non-Debt Instruments (NDI) Rules, 2019: foreign investment in AIFs under Schedule 7.

Overview

Alternative Investment Funds (AIFs) in India are regulated by the Securities and Exchange Board of India under the SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations). An AIF is a privately pooled investment vehicle that collects funds from sophisticated investors — typically HNIs, family offices, and institutional investors — for investment in accordance with a defined investment policy. Unlike mutual funds, AIFs are not open to retail investors; each investor must commit a minimum of ₹1 crore (₹25 lakh for employees/directors of the AIF).

There are three categories of AIFs: Category I — venture capital, angel, SME, social impact, infrastructure funds (tax pass-through under Section 10(23FB) ITA). Category II — private equity, debt, real estate, fund of funds (tax pass-through). Category III — hedge funds, PIPE funds, long-short equity (entity-level taxation, leverage permitted).

The registration process involves filing Form A (AIF registration) and Form B (Investment Manager) on the SEBI Intermediary Portal. Eligibility: body corporate; minimum corpus ₹20 crore (₹10 crore for angel funds); Investment Manager net worth per SEBI Circular SEBI/HO/AFD-1/PoD/P/CIR/2023/130 — Cat I/II: ₹5 crore; Cat III: higher of ₹5 crore or 0.25% of AUM. The CA provides the net worth certificate, certifies corpus commitments, advises on tax pass-through structure, and provides FEMA advisory for foreign investors.

Frequently Asked Questions

Which SEBI regulations govern AIF registration and what categories exist?
SEBI (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations") notified under Section 11 of the SEBI Act, 1992 govern the entire lifecycle. Regulation 3 defines three categories: Category I (venture capital, SME, social, infrastructure funds), Category II (private equity, debt, fund of funds), and Category III (hedge funds using leverage or complex strategies). Registration applications are filed on Form A to SEBI along with the application fee specified in the Third Schedule.
What is the minimum corpus and investor commitment an AIF must maintain?
Regulation 10 of the AIF Regulations requires a minimum corpus of INR 20 crore per scheme (INR 10 crore for Angel Funds under Regulation 19B). Each investor must commit a minimum of INR 1 crore; the threshold is INR 25 lakh for employees or directors of the AIF or its manager. These minimums are continuous obligations and must be met at every close and throughout the fund life.
What must the Private Placement Memorandum disclose before the first close?
Regulation 11 requires the PPM to disclose investment strategy, risk factors, fee and expense structure, valuation methodology, and conflict-of-interest policy. SEBI circular SEBI/HO/AFD-1/CIR/P/2022/168 introduced a standardised PPM format that all AIFs must follow. SEBI must receive the PPM for review at least 30 days before any fundraising activity under Regulation 12.
How is carried interest and management fee taxed at the fund and manager level?
Under Section 115UB of ITA 1961 (applicable for historical years; ITA 2025 equivalent pending notification), Category I and II AIFs have pass-through status for all income except business income, which is taxed at the fund level at maximum marginal rate. Carried interest is taxable in the hands of the recipient as business income or capital gains depending on structure. Category III AIFs are taxed at the fund level on all income streams including STCG under Section 111A and LTCG under Section 112A.
What ongoing SEBI filings are required after an AIF is registered?
Regulation 22 mandates quarterly reports within 7 days of each quarter-end covering NAV, investor details, portfolio summary, and fees charged. Annual reports must be filed within 180 days of financial year-end. Large Value Funds with corpus above INR 500 crore per scheme face additional reporting obligations per SEBI circular dated April 19, 2023. Any change in key investment team, investment strategy, or fee structure requires prior SEBI intimation under Regulation 20.

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