IVCA seeks tax parity, approval for AIFs to invest in NBFCs ahead of budget


Budget 2020: Indian Private Equity and Venture Capital Association (IVCA) has requested the Union Government to bring in tax parity for the listed and unlisted shares and allow the category 1 Alternative Investment Funds (AIF) to invest in Non Banking Finance Companies (NBFC).

The association said that currently there is a considerable benefit on investing in listed shares than unlisted shares in terms of taxes levied. In order to further channelize domestic and foreign risk capital, there is a need for complete tax parity for investments in listed and unlisted securities.

As compared to domestic investors, Long Term Capital Gains (LTCG) earned by foreign investors in private companies attract taxation at a concessional rate of 10 per cent while domestic VC & PE investments taxed at 20 per cent (for LTCG) with an enhanced surcharge of 37 per cent.

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