Tax trap: investing in India

Despite its tag as an emerging economy, the risk of tax leakage on any poorly planned foreign direct investment would be familiar to practitioners in more mature markets, warns Amerjeet Singh.

Amarjeet Singh is a tax partner on secondment to KPMG LLP’s UK practice. (Amarjeet.singh@kpmg.co.uk)

Overview

A foreign investor looking to undertake M&A activity or embark on a greenfield project in India has to be aware of, and adhere to, multiple legislations, guidelines and regulations. In addition to ancillary federal and state legislation, at a national level there are seven key legislative areas where any prospetive venturer needs to exercise appropriate due diligence: