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April 03, 2017

Media Mention: March sees rush to close deals as new tax rules kicks in from April 1

Economic Times' Sachin Dave has an interesting article - featuring Venture Intelligence data - descrbing how deal makers raced against the clock to seal Private Equity investments before March 31 (post which, new taxation rules come into effect under the amended India-Mauritius tax treaty). Extracts:
Scores of lawyers and dealmakers across the country were busy closing acquisition transactions before April 1, 2017, when new tax rules kick in. Indeed, close to 150 such deals were signed in March. "In terms of private equity, almost $3.6 billion — or two-thirds of the total value of investments during the January-March quarter — came in during March alone," said Arun Natarajan, CEO of Venture Intelligence.  
A revision in the tax treaty between India and Mauritius is one such change that has sparked a flurry of deals. As per the revised treaty, Mauritius-based entities buying shares of Indian companies before April 1 will not have to pay capital gains tax when they choose to exit in future. But such capital gains (as and when shares are sold later) will attract tax if the acquisition is closed after March 31, 2017.  

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.