AIFs may accelerate switch to LLPs, sans respite on FPI surcharge

Such funds often have exposure to derivatives and follow strategies that can seek to make money when markets are going up, as well as by betting on a fall when they sense weakness in the market

Sophisticated investment funds for the rich are likely to speed up on structural changes after failing to get relief on higher taxation.
 

Finance Minister Nirmala Sitharaman rolled back the additional surcharge on foreign and domestic investors on Friday. The relief is provided only to tax payable on long-term and short-term capital gains as far as alternative investment funds (AIFs) are concerned. 

The higher surcharge would still apply to domestic entities such as category-III alternative investment funds that do derivatives trades and earn income under the head business income, even as a post-announcement clarification eased the pain for FPIs on a similar