Jan 31, 2000|
Venture Capital funds to get more freedom
The government has decided to make the scenario for venture capital funds more simpler by giving them more flexibility and freedom by eliminating double taxation and providing a single window clearance for them.
For the venture capital funds (VCF's) the government has come out with the following measures:
- Government to provide single window clearance to VCF's through the Securities and Exchange Board of India (SEBI).
- Decision to eliminate double taxation on VCF's was taken by SEBI, Reserve Bank of India, Central Board of Direct Taxes and Department of Company Affairs.
- Criterion for VCF's to get concessions and to register to be unveiled soon.
- Henceforth VCF's will have to register with SEBI only.
This move will provide more flexibility, speed up the process to set up an VCF, and eliminate procedural hassles and delays for companies planning on setting up venture capital funds. Also on the taxation front now only income in the hand of investors of the VCF will be taxed unlike earlier the income of the VCF would be taxed and also income of the investors of the fund were taxed.
This will lead to the setting up of more venture capital funds by eliminating bureaucratic delays as they have to register themselves only with SEBI. Venture capital is essential in India especially for high risk and high return type of technology companies which find it difficult to raise funds from other traditional channels.
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