AIFs and Govt in Talks Over Taxation of 'Carry Income' Amid GST Concerns

Discussions are underway between the government and Alternative Investment Funds (AIFs) regarding the taxation of carry income, a portion of profits earned by AIF managers. AIFs argue that GST on carry income could affect the industry’s growth and the flow of foreign capital into Indian markets. The current ambiguity in tax treatment is creating challenges for fund managers. The negotiations aim to provide clarity on how carry income should be taxed under GST and other relevant laws, potentially leading to revised taxation guidelines for the industry.