Demand of over Rs 500 crore additional tax slapped on PE/VC funds

Large global funds, including those dealing in private equity, have misused tax treaties with the Mauritius, Singapore, and Cyprus and under-reported income, the Income-Tax (I-T) Department has said. The additional tax demand on these fund houses is more than Rs 500 crore, according to an estimate.

The tax authorities gave assessment orders to at least 12 such houses last week, and initiated penalty proceedings against them.

This follows the reassessment notices issued to them last fiscal year, seeking an explanation for irregularities in calculating income in 2013-14, 2014-15, and 2015-16.

The department has reopened old assessment cases against these entities.