Budget 2019: Rise in taxes to take a toll on category-III alternative funds

Budget 2019 mentioned an increase in the taxation of trusts and associations of persons

Sophisticated investment funds marketed to the rich will now have to pay higher taxes. New norms introduced in the Budget are effective from April 1 but several investors may have sold units in the category III AIFs in the past three months. It is unclear who would have to bear the brunt of the higher tax for this period, said experts.

The Union Budget on July 5 mentioned an increase in the taxation of trusts and associations of persons. This would bring most category III AIFs within the higher tax net as these are structured as trusts.

This includes