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The Indian fiscal establishment represents the greatest threat to the country’s growth narrative by repeatedly attacking the same taxpayer base, he warned on Monday circle Cio Cio Gurmeet Chadha, since the controversy increased on a proposed tax increase on the profits of sale of shares carried out through limited liability associations (LLP).
“First, by increasing capital gains tax, we promote the FPI, now we want to ensure that even the promoters and family offices analyze other options,” said Chadha, reacting to a report on the new Income Tax invoice. “The greatest risk to the history of India is our group of fiscal experts … continues to find new ways of taxing the same group of people over and over again,” he published in X.
Chadha’s comments followed a report by Economic Times that describes how Indian promoters and family offices, many of whom surround investments through LLPS, are aimed at a strong leap in taxes under the proposed law. If promulgated in its current form, the new bill would increase the effective long -term capital gains tax for LLP from 12.5% to 18.5% by applying the Alternative Minimum Tax (AMT) to these entities.
During the last decade, the LLPs have become a flexible vehicle and low tax for the shares of the holders, invest in private capital and administer family wealth. However, the AMT disposition extended now would apply independently of whether such LLP claim deductions or tax exemptions, effectively increasing their tax burden by 6%.
Currently, AMT applies only if deductions significantly reduce fiscal liabilities below 18.5%. Llp that work only as accounting and claim that such deductions remain exempt. The proposed law eliminates this distinction, even capturing clean capital gain structures under the floor of 18.5%.
The PWC Indian partner, Bhavin Shah, said that the select committee that reviews the bill has recognized the unwanted consequences and can introduce clarifications for those evaluated non -corporate who do not claim exemptions.
Ashish Karundia, founder of the firm of Ca Ashish Karundia & Co., warned that imposing AMT on clean LLP structures would drastically increase its fiscal load and reduce its attraction. “Such movement could undermine the appeal of companies and LLP for new companies and family offices in India,” Karundia said, adding that he could also contradict broader objectives of building India as a global financial center.
