Master File Thresholds for Global Asset Management Groups With Indian AMCs

Global asset management groups with Indian Asset Management Companies (AMCs) face significant master file obligations under the Direct Tax Code (DTC) 2025. The master file requirements apply when specific thresholds are crossed, requiring detailed documentation of the group structure, business, and transfer pricing policies. This guide analyses the master file thresholds and compliance requirements for global asset management groups.

The Master File Framework

Section 171 — Maintenance of Information and Documents

Section 171(1) requires every person who has entered into an international transaction or specified domestic transaction to keep and maintain such information and document in respect thereof and for such period and in such manner, as may be prescribed.

Rule 123 — Master File Requirements

Rule 123 of the Income-tax Rules, 2026 prescribes the specific information and documents to be maintained by constituent entities of international groups.

Thresholds for Master File

Rule 123(1) — Consolidated Group Revenue Threshold

Every person, being a constituent entity of an international group shall maintain the master file if the consolidated group revenue of the international group, as reflected in the consolidated financial statement for the accounting year, exceeds ₹500 crore.

Transaction Value Thresholds

In addition to the ₹500 crore group revenue threshold, the following transaction thresholds must be met:

₹50 Crore Threshold — The aggregate value of international transactions during the accounting year, as per the books of account, exceeds ₹50 crore.

₹10 Crore Threshold (Intangibles) — The aggregate value of international transactions in respect of purchase, sale, transfer, lease or use of intangible property during the accounting year exceeds ₹10 crore.

Filing Requirement

The information and document specified in Rule 123(1) shall be furnished to the Joint Director referred to in Rule 124(1), in Form No. 56, on or before the due date for furnishing the return of income as specified under Section 263(1)(c).

Part A Filing

The constituent entity shall furnish Part A of Form No. 56 even if the conditions specified in sub-rule (1) are not satisfied.

Application to Asset Management Groups

When Do AMCs Need to File?

Indian AMCs must file the master file if:

1. The global asset management group's consolidated revenue exceeds ₹500 crore
2. The aggregate value of international transactions exceeds ₹50 crore (or ₹10 crore for intangible transactions)

Common International Transactions of AMCs

• Management fees paid to/received from overseas group entities
• Investment advisory fees
• Distribution fees
• Licensing of intellectual property (brand, trademarks, proprietary systems)
• Cost-sharing arrangements
• Employee secondments

Intangible Property

Asset management groups often have significant intangible assets:

• Brand value and reputation
• Proprietary investment management systems
• Investment methodologies
• Client relationships

Master File Contents

Required Information

The master file must contain:

1. List of Entities: A list of all entities of the international group along with their addresses

2. Ownership Structure: A chart depicting the legal status of the constituent entity and ownership structure

3. Business Description:

   • Nature of the business or businesses
   • Important drivers of profits
   • Description of the supply chain for the five largest products or services
   • List and brief description of important service arrangements
   • Description of the capabilities of the main service providers
   • Details about the transfer pricing policies for allocating service costs
   • List and description of the major geographical markets
   • Description of the functions performed, assets employed and risks assumed
   • Description of the important business restructuring transactions

4. Intangible Property:

   • Description of the overall strategy for development, ownership and exploitation of intangible property
   • List of all entities engaged in development and management of intangible property
   • List of all important intangible property or groups of intangible property
   • List and brief description of important agreements
   • Detailed description of the transfer pricing policies
   • Description of important transfers of interest in intangible property

5. Financing Arrangements:

   • Detailed description of the financing arrangements
   • List of group entities that provide central financing functions
   • Detailed description of the transfer pricing policies related to financing arrangements

6. Financial Statements: A copy of the annual consolidated financial statement

7. Advance Pricing Agreements: A list and brief description of the existing unilateral advance pricing agreements and other tax rulings

Practical Compliance for AMCs

1. Assess Applicability

• Determine whether the global asset management group meets the ₹500 crore threshold
• Determine the aggregate value of international transactions
• Identify all intangible transactions

2. Gather Information

• Gather information on the group structure
• Gather information on the business, intangible property, and financing arrangements
• Gather financial statements

3. Prepare the Master File

• Prepare the master file in Form No. 56
• Ensure completeness and accuracy
• Coordinate with group entities

4. File Timely

• File Form No. 56 on or before the due date
• Ensure timely compliance

5. Maintain Records

• Maintain records of the master file
• Keep records for the prescribed period
• Update records as necessary

Consequences of Non-Compliance

Penalties

• Section 459: Penalty ranging from ₹5,000 to ₹15,000 per day for failure to furnish the report
• Section 459: Penalty of ₹5,00,000 for furnishing inaccurate information
• Section 442: Penalty of 2% of the value of each international transaction for failure to maintain documentation

Expert Legal Guidance

Anuj Desai & Associates provides comprehensive legal advisory services on master file compliance for global asset management groups. Our international tax experts help AMCs understand their obligations, prepare documentation, and navigate the regulatory framework. We assist in applicability assessment, document preparation, and representation before income-tax authorities.

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Disclaimer: This article provides general information and does not constitute legal advice. For specific guidance on master file compliance or any other international tax matter, please consult qualified legal professionals.

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Need Expert Legal Guidance?

Navigating the complex master file framework for global asset management groups requires experienced legal counsel. At Anuj Desai & Associates, we provide comprehensive international tax advisory services, including:

• Applicability Assessment: Evaluation of master file obligations
• Document Preparation: Assistance with Form No. 56 preparation
• Compliance: Guidance on ongoing compliance requirements
• Representation: Representation before income-tax authorities

Contact us for expert legal guidance on your master file compliance matters.

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