A promoter-CEO could possibly create loopholes such as management structures or management fees to save tax, said Vikas Vasal, national leader, tax, at Grant Thornton India LLP. “But there is absolutely no leeway for a professional CEO,” he said. “This is a steep hike to the overall cost of operations and a huge tax payout for an individual. It will be a huge deterrent for institutions outside India, which would have looked to shifting high-paying jobs to India. This especially when the government wanted to promote foreign funds to set up base in India.”

This article appeared in Economic Times on 19th July, 2019.