Different segments of the financial services sector, such as banking, capital markets, insurance or asset management are all set to grow in the next few years. While the government, industry leaders and the regulators are working on building sustainable banking and para banking systems, global disturbances will compel the sector to remain focussed inwards. Foreign institutional investors in the primary and secondary markets are back in business. Large players are looking at investing and setting up business presence in India.
The highly regulated financial services industry and the complex Indian tax regime make it extremely important for existing and potential players to understand the nuances of the Indian regulatory and tax regime. The fallout of ignoring tax and regulations cannot be understated. A well-planned tax structure can lower tax and compliance costs. It is equally important to structure businesses in compliance with regulatory requirements, investment rules, licensing requirements, etc.
We provide comprehensive yet practical advice on direct tax matters and help you implement it in a cost-effective manner. A poorly planned tax structure can affect your cash flow and returns, drain your profitability and even bring the taxman to your doorstep, leading to diversion of valuable resources towards litigation. On the other hand, a well-planned tax structure can keep such costs low. For financial service companies, indirect taxes are among the largest costs after staff, IT and premises. With growth in the international financial services industry, there has been a marked increase in the number of indirect tax cases coming before the judiciary.
Ref: Circular No.41 of 2016