Answer

1. F

   Facts

   PMS typically charges: Management fee (1-2% of AUM annually) + Performance fee / profit sharing (10-20% of profits above a hurdle rate, typically 10%).

2. P

   Provisions and law

   • IT Act, Sec 72 (old 48
3. A

   Analysis

   Tax deductibility: Management fee and performance fee incurred in connection with earning capital gains are deductible from capital gains under Sec 72, Income-tax Act 2025 (old Sec 48) as "expenses incurred wholly and exclusively in connection with the transfer." This is contested, the IT department has tried to disallow these. Courts have generally allowed them, but it remains a risk area. Best practice: Ensure the PMS gives you a detailed fee breakup in the annual statement. Claim fees as deduction from capital gains, not as a business expense.

4. C

   Conclusion

   Talk to a Savvy for the exact next step on your case.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.