Regarding the treatment of losses at the AIF fund level, only non-business losses arising in respect of units held for more than 12 months are passed through to investors, whereas all losses are not available for set-off or carry-forward at the fund level.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

A

All losses are available for set-off at fund level
Losses other than business losses are passed through if held >12 months

Correct answer

Why this is the answer

Only certain losses, specifically non-business losses held for over 12 months, are pass-throughs to investors; fund-level losses are generally not available for set-off.

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NISM Series XIX A- Alternative Investmen…