The Securities and Exchange Board of India has proposed to accord venture capital funds the status of a ‘specialized mutual fund’, according to a media report.
This proposal has been sent to the Union Finance Ministry recently. The objective is to provide venture capital funds tax exemption under Section 10 (23) D of the Income-Tax Act, the report added.
Venture capital investors are liable to a 30 per cent capital gains tax. At present, the investors to whom it pays out are also taxed.