Family offices hit again? CIO warns that rethinking taxes may erode the private capital base in India

The Indian Tax Corporation is the biggest threat to the country’s growth novel by targeting the taxpayer base frequently, and Circle Cio Gurmeet Chadha warned on Monday, as the controversy was launched at a proposed tax height on the stock sale profits made through limited liability partnerships (LLPS).

“First, by increasing the capital profit tax, we brought us fpis away, we now want to make sure that promoters and family offices look at other options,” said Chad. “The biggest risk of India’s story is our tax research tank … It continues to find new ways to impose taxes on the same group of people over and over again,” as published on X.

Hudha’s comments followed an economic report showing how Indian promoters and family offices – who direct their investments through LLPS – a highly declining leap in taxes under the proposed law. If it is in its current form, the new draft law will raise the effective tax on long -term capital gains for LLPS from 12.5 % to 18.5 % by applying the minimum alternative to tax on these entities.

Over the past decade, LLPS has emerged as a flexible low -tax car for the holding of the holding company, investing in private stocks, and managing family wealth. However, the enlarged AMT rule will be applied now regardless of whether these tax customizations claimed this LLPS, which effectively increases the tax burden by 6 %.

Currently, AMT does not apply unless discounts are dramatically reduced from tax commitment less than 18.5 %. LLPS which only works as keeping clothes and claiming does not remain such discounts exempt. The proposed law removes this discrimination, as it fulfills even 18.5 % clean capital gain structures.

Pwc India Bhavin Shah’s partner indicated that the chosen committee that has declined the bill has been approved with unintended consequences and has made clarifications to non -fanatic residents who are not demanding exemptions.

Ashish Karundia, founder of Ca Ashish Karundia & Co. , The imposition of AMT on clean LLP structures would raise a sharp tax load and reduce their attractiveness. “Such a move can undermine the attractiveness of companies and LLPS for startups and family offices in India,” Caronda said, adding that it may also contradict the broader targets to build India as a global financial center.