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A family holding company owns investments, listed stocks, unlisted equity, REITs, AIF units, real estate. All investment activity happens at the company level.
HNI wealth · Family Office
Holding company: the investment vehicle for family wealth
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Provisions
Companies Act 2013 | IT Act, Sec 200 (old 115BAA) | Dividend, Sec 2(22)
Analysis
Tax advantages: Inter-company dividends between group companies: exempt under Sec 10(34A) (dividend from domestic company). Capital gains at corporate rate: 22% (much lower than individual surcharge at ₹5Cr+ income). Business expenses deductible against income. The dividend trap: Money stuck in the holding company, distributing to family members as dividend is taxed at slab rate in their hands. Planning: use salary, director fees, loan repayments (for original capital), and strategic timing of dividends to manage outflow tax.
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