From a tax perspective, an investor pays tax at the slab rate applicable to his level of income. This is where PMS could be considered more tax friendly vis-a-vis AIF. For example, if an investor in PMS earns Long Term Capital Gains on equity shares of INR 50,000 it is tax free for the investor as the gain does not exceed the limit of one lakh rupees. If it Exceeds 1 lakh rupees, then the Long term capital Gains tax would be levied at 10%.