Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: TDS :: due date for vat payment :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: VAT Audit :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES
News Headlines »
  10 incomes you need not pay any tax on
 How To File Income Tax Returns In Three Steps By March 31, 2018
 10 things about income tax every taxpayer should know
 What to do if your TDS is not deposited with the government
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31
 5 income tax changes which will come into effect from April 1, 2018
 Why you shouldn't be a last-minute tax filer
 How to calculate income tax for this assessment year on Moneycontrol
 6 Tax notices you may get and how to cope with them Income Tax Notice
 Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide

Tax bug clogs PE fund flow
March, 19th 2007

The ill effects of the budget proposal to restrict tax benefits of venture funds and private equity funds to just nine sectors are beginning to show. With the removal of pass-through status for private equity (PE) investments in most sectors, domestic PE players are now hesitant to infuse funds.

Experts say nearly $800 million of the existing funds of domestic PE players like IL&FS Investment Managers, ICICI Ventures, IDFC Private Equity and UTI Ventures are waiting to be deployed. These players together manage about $2.8 billion worth of funds.

We have deployed 26% of our second fund and with the change in the law, there is uncertainty over how the remaining funds would be deployed, said IDFC Private Equity president & CEO Louis Miranda.

In this years budget, income-tax exemptions for venture capital funds registered in India have been restricted to nine sectors including biotechnology, nanotechnology, IT hardware/software, R&D for new chemical entities, seed research, dairy, poultry biofuels and large hotel-cum-convention centres.

If domestic venture capital funds invest in any other sector and make money, they will have to pay taxes now. Till date, these funds enjoyed a pass-through status. Foreign funds, which are registered in Mauritius and only have an asset management arm in India, will remain unaffected from this curb.

While future funds can be raised as offshore entities to avoid the changed tax laws, it is the existing funds of these PE players that will be severely impacted. As these existing funds have been incorporated in India, the investments cannot be routed through tax havens like Mauritius.

Investors park money in funds, keeping in mind the existing tax rules. A change in tax law implies these players will have to take fresh approvals from their investors for deploying the existing funds.

The change in the pass-through status will slow down deployment for existing funds as we will now have to go back to our investors and take fresh approvals for making investments. The overall returns will also be skewed, said IIML MD Shahzaad Dalaal.

Some PEs like IDFC and IL&FS are considering setting up future funds in tax havens like Mauritius to circumvent the new regulation. But this requires RBI approval.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions