Income Tax Act, 2025
Section 5: Subs. by Act 32 of 2003, s. 6, for “dividends” (w.e.f. 12004).
5. Subs. by Act 32 of 2003, s. 6, for “dividends” (w.e.f. 12004).
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Provided further that any approval by the Central Government shall, at any one time, have effect
for such assessment year or years, not exceeding three assessment years, as may be specified in the
order of approval:
1[Provided also that nothing contained in this clause shall apply in respect of any investment
made after the 31st day of March, 2000.]
Explanation.—For the purposes of this clause,—
(a) “venture capital fund” means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the trustees
for investments mainly by way of acquiring equity shares of a venture capital undertaking in
accordance with the prescribed guidelines;
(b) “venture capital company” means such company as has made investments by way of
acquiring equity shares of venture capital undertakings in accordance with the prescribed
guidelines; and
(c) “venture capital undertaking” means such domestic company whose shares are not listed
in a recognised stock exchange in India and which is engaged in the—
(i) business of—
(A) software;
(B) information technology;
(C) production of basic drugs in the pharmaceutical sector;
(D) bio-technology;
(E) agriculture and allied sectors; or
(F) such other sectors as may be notified by the Central Government in this behalf; or
(ii) production or manufacture of any article or substance for which patent has been
granted to the National Research Laboratory or any other scientific research institution
approved by the Department of Science and Technology;]
1[(23FB) any income of a venture capital company or venture capital fund 2[from investment] in a
venture capital undertaking:
3
[Provided that nothing contained in this clause shall apply in respect of any income of a venture
capital company or venture capital fund, being an investment fund specified in clause (a) of
the Explanation 1 to section 115UB, of the previous year relevant to the assessment year beginning
on or after the 1st day of April, 2016.]
4[Explanation.—For the purposes of this clause,—
(a) “venture capital company” means a company which—
(A) has been granted a certificate of registration, before the 21st day of May, 2012, as a
Venture Capital Fund and is regulated under the Securities and Exchange Board of India
(Venture Capital Funds) Regulations, 1996 (hereinafter referred to as the Venture Capital
Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of
1992); or
“venture capital fund” means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the trustees
for investments mainly by way of acquiring equity shares of a venture capital undertaking in
accordance with the prescribed guidelines;
“venture capital company” means such company as has made investments by way of
acquiring equity shares of venture capital undertakings in accordance with the prescribed
guidelines; and
“venture capital undertaking” means such domestic company whose shares are not listed
in a recognised stock exchange in India and which is engaged in the—
business of—
software;
information technology;
production of basic drugs in the pharmaceutical sector;
bio-technology;
agriculture and allied sectors; or
such other sectors as may be notified by the Central Government in this behalf; or
production or manufacture of any article or substance for which patent has been
granted to the National Research Laboratory or any other scientific research institution
approved by the Department of Science and Technology;]
1[
any income of a venture capital company or venture capital fund 2[from investment] in a
venture capital undertaking:
3
[Provided that nothing contained in this clause shall apply in respect of any income of a venture
capital company or venture capital fund, being an investment fund specified in clause
of
the Explanation 1 to section 115UB, of the previous year relevant to the assessment year beginning
on or after the 1st day of April, 2016.]
4[Explanation.—For the purposes of this clause,—
“venture capital company” means a company which—
has been granted a certificate of registration, before the 21st day of May, 2012, as a
Venture Capital Fund and is regulated under the Securities and Exchange Board of India
(Venture Capital Funds) Regulations, 1996 (hereinafter referred to as the Venture Capital
Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of
1992); or