Creating an LLP for tax saving purpose

Personal finance
1

My CA has advised to create an LLP with my wife as 95% Director and Mother-in-Law as 5% director. I myself has NRI status.

He has advised to create Investment holding company - using which - we can park say 2 cr. & invest it into MFs/Stocks/FDs and generate income on it.

benefits being that the expenses can be shown against such LLP - which can reduce the taxable profits generated in LLP and hence reducing the overall tax burden.

is anyone having such arrangement.

  1. What are the cons of such arrangement.
  2. How difficult it will be for compliance/accounting point of view each year.
  3. How expensive it might be to manage such LLP.
  4. Please share your knowledge/experience in this regards.
  5. Any other - better - way to invest large funds with meaningful tax savings?
2 Likes
2

There are extensive threads on this in this forum already. LLP/partnership/HUF.

3

Won’t work.

As a fellow NRI, consider investing abroad to save on tax. Also depends on which country you are a Tax resident in.

4

Why? :thinking: Can you elaborate a bit?

Can you share any details that justify this opinion?
(what challenges/issues do you see? Any helpful links/references?)