Private Equity Exit Through M&A And Its Tax Implications
- IJLLR Journal
- Apr 28
- 1 min read
Sanjith S, LL.B., Symbiosis Law School, Pune
ABSTRACT
The research article will delve into the role of Private equity and its exit through Mergers and Acquisitions route. It will start with the key parties to the exit transaction, such as Private Equity, Acquiring Company and Target Company. After this, discussion starts with M&A being the preferrable route of exit over the Initial Public Offering route and the Indian legal framework regulating M&A transactions. Then, the main element of this article, that is, tax implications of such transactions will be introduced by briefing on the relevant tax treaties and statutes, which will be discussed in detail in analysis part of the article. The article, then, sets foot on the key law statutes and regulations in context of Mergers and Acquisition. Shifting to tax implications of the exit transaction, the article will discuss in detail on classification of the profit or income gained and the treaty hurdles. The article will move to Analysis part, where the detailed case analysis on Tier 1 Global PE firms in relate to Indian Companies have been discussed in line to treaty befitting and exploitation with the court rulings. And the article concludes with three key recommendations, balancing the interests of PE firms and the Indian Income Tax Department.
Keywords: Private Equity (PE), Mergers and Acquisitions (M&A), Exit Route, Income Tax Act 1961, Double Taxation Avoidance Agreements (DTAA).
