Quick Summary
In a significant move to streamline tax administration and align with global financial regulations, the Central Board of Direct Taxes (CBDT) issued Notification No. 10/2025 on January 27, 2025. This notification, officially titled the Income-tax (Second Amendment) Rules, 2025, introduces critical amendments to the Income-tax Rules, 1962. Key Highlights of the Notification 1. Venture Capital Fund Regulations Under clause (23FB) of section 10 of the Income-tax Act, 1961, the rules now recogni
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FAQ :
The main purpose is to streamline tax administration for IFSCs and align with global financial regulations.
Venture Capital Funds established in IFSCs are now recognised as Category I Alternative Investment Funds under clause (23FB) of section 10 of the Income-tax Act, 1961.
Permitted activities include lending (loans, guarantees, securitization), factoring and forfaiting of receivables, and treasury services like intra-group financing and risk hedging.
Interest paid by these companies on debts issued by non-residents must be in foreign currency.
Retail schemes need a diverse investor base and limited exposure to associates, unlisted securities, and single companies. ETFs must be listed, traded on recognised stock exchanges, and comply with IFSC regulations.
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