A strategic overview of tax implications for PMS and AIF investments in FY 2025–26.
Short-Term: ≤ 12 Months (20%)
Long-Term: > 12 Months (12.5%)
Short-Term: ≤ 36 Months (Slab)
Long-Term: > 36 Months (12.5%)
| Feature | PMS | AIF Cat I & II | AIF Cat III |
|---|---|---|---|
| Tax Liability | Investor pays directly | Investor pays (Pass-through) | Fund settles (Post-tax) |
| Expense Claims | Allowed | Not Allowed | Not Allowed |
| Dividend Tax | Investor Slab | Investor Slab | Fund Level |
For HNI investors seeking net-alpha maximization, PMS remains advantageous due to expense off-setting. For those seeking fiduciary simplicity, Category III AIFs remove the burden of individual tax reporting.