Accredited Investing: Get Huge Tax Advantages & Passive Income in 2021
                     Accredited Investing: Get Huge Tax Advantages & Passive Income in 
2021 
 
 
 
An Overview 
 
If you are an individual who plans on going into business or earns enormous profits, then there 
is a possibility of you becoming an accredited investor. It is a wonderful opportunity because 
accredited investors tend to get huge advantages in tax services and there might be chances of 
you paying a small amount of taxes or no tax at all. In this article, you will learn about what 
accredited investing is and why is it beneficial.  
 
What Is Accredited Investing? 
 
An accredited investor is an individual or a legitimate entity who is permitted to take part in 
investments that are not registered with the Securities and Exchange Board of India or SEBI. 
This rule is meant to prove that investors have the resources and sophistication to invest in 
likely riskier investments as well as get through any losses whatsoever. 
 
SEBI has introduced new rules for accredited investing and if you meet those requirements, 
then you qualify as an accredited investor. Being an accredited investor gives you the 
opportunity to make an absolutely passive income. 
 
Accredited investing bears risk and you might lose your money entirely when you make an 
investment. But to look at the bright side, you can stand to make huge profits. So, it is 
extremely crucial that if you are an accredited investor, you take your own time and make an 
investment that is lined up with your tolerance of risk.  
 
Advantages Of Being An Accredited Investor 
 
There are a lot of people who qualify as accredited investors but are not aware of their status 
and hence fail to take advantage of being one. In order to help you understand more about 
investing outside of the public market, here are a few reasons why being an accredited investor 
generates more access and opportunities. 
 
 
1. Better Yield Opportunities 
 
When an organisation raise funds outside of the public capital markets, it is usually done 
as a private placement. Most of the times, these private placements give better yields 
than what is provided in the public markets. This is because of the underlying access of 
the issuer to handsome capital. You can take part in these offerings as an accredited 
investor. With the help of a professional who offers tax and accounting services, you 
can earn really huge profits as that individual will assist you with anything related to tax 
services. 
 
 
2. Opportunity To Invest In Small Businesses 
 
You can support small businesses with missions if you are an accredited investor. There 
are various platforms that allow you to communicate with any startup you wish to 
invest in. Once you invest in any of the startups, you will get access to their audited 
financial statements which will help you in analysing which area of the startup requires 
most investment. 
 
 
3. Diversify Your Portfolio 
 
When the interest rates boost up, only investing in public markets will give you 
narrowed options for diversification for your investment portfolio. Looking for 
alternative assets to invest in that are not corresponding with the public markets will 
help in decreasing systematic risk exposure. As an accredited investor, you can get 
access to these opportunities. You can also get access to online tax services wherein 
you can communicate with any professional who can offer you tax and accounting 
services. 
 
How Can You Become An Accredited Investor In India? 
 
If you wish to become an accredited investor in India, you will be required to apply fr 
accreditation to the depositories or the stock exchange. Once your eligibility is decided, you will 
be granted accreditation for three years by the Securities and Exchange Board of India. You are 
also required to keep the depositories or stock exchange informed of any alteration in the 
financial status or the audited financial statements. 
 
To Wrap it Up! 
 
So, by now, if you are not quite an accredited investor, you do not have to worry because you 
can still get access to some of these advantages as compared to a more active investor. The 
requirements for accredited investors are decided by the administrative body to make sure that 
the interests of the investors are protected as the risk of losing capital on different investments 
are usually really high. Now, with the help of this article, you can go ahead and make an 
informed decision.