New Mauritius tax norms to hit PE investments in India, says IVCA

The move to tax capital gains from India would fundamentally alter the character of all income arising from Indian AIFs and lead to increased litigation

The Indian Venture and Alternate Capital Association (IVCA) has said the recent Mauritius Revenue Authority (MRA) ruling to tax capital gains from India would fundamentally alter the character of all income arising from Indian AIFs (alternative investment funds) and lead to increased litigation and uncertainty for India-bound investments.

IVCA said the move to treat all income from Indian AIFs as dividends and not as constituent income flows (dividend, interest or capital gains), will wreak havoc on funds with a presence in Mauritius and investments in India. “Mauritius’s attractiveness as a stepping stone to Indian equities will be adversely affected by