Budget 2024: IVCA bats for tax parity on investments in listed and unlisted securities

As the interim budget approaches, the Indian Venture and Alternate Capital Association (IVCA) has said that its top concerns relate to taxation rates and investment in alternate investment funds (AIFs).

The IVCA is urging for equal tax rates between listed and unlisted securities for domestic investors.

In an interview with CNBC-TV18, Ashley Menezes, Partner & COO of ChrysCapital and Vice Chairperson of IVCA, expressed the longstanding request for tax parity. He stated, “One of the long standing asks is around tax parity. For long, domestic investors have been treated differently relative to foreign investors. More importantly, the long term capital gains on unlisted investments is actually at twice the tax rate relative to a long term capital gain from a listed investment. Given that private equity is an infusion that India needs to help build the overall growth, it is an essential commodity. So in a way, private equity is being penalized for investing in young unlisted companies relative to the listed side where you enjoy just a 10% tax versus a 20% tax.”

Additionally, the IVCA is optimistic that the interim budget will provide clarity on rules related to tax collection at the source for the sale of goods.

Menezes shared ChrysCapital's positive outlook, stating that the firm has invested over $5 billion in India in recent years and remains optimistic about investment opportunities in the coming decade. He identified the consumption, pharmaceutical, and manufacturing sectors as promising areas for investment.