G. Priyadarshini, CMR University, School of Legal Studies
ABSTRACT
Venture capital is a private equity financing that is provided to start-ups and other small-to-medium enterprises (SMEs) to assist them in their growth and development through funding. In this paper, an analyzation is made on the taxation on venture capital funds. The paper begins to talk about the treatment of venture capital funds under the Income tax Act by providing the history of such tax treatment since the Finance Act, 1995 and tax liability on the investor with respect to the venture capital funds. Furthermore, the paper tends to identifies whether VCF is a specific or discretionary trust and uses the same to analyse the tax implication on VCF. Finally, the paper discusses the 2021 judgement by Customs Excise and Service Tax Appellate Tribunal, Bangalore as the same imposed service tax on venture capital funds.
