Amendment to Income-tax Rules: New Guidelines for Venture Capital Funds, Finance Companies, and ETFs u/ss 10 and 94B.

The Income-tax (Second Amendment) Rules, 2025, issued by the Central Board of Direct Taxes, amend the Income-tax Rules, 1962. Key changes include defining conditions for Venture Capital Funds under section 10, recognizing them as Category I Alternative Investment Funds under the International Financial Services Centres Authority Act, 2019. Additionally, new rules specify permissible activities for Finance Companies in International Financial Services Centres under section 94B, including lending, factoring, and treasury functions. The amendment also outlines conditions for retail schemes and Exchange Traded Funds, emphasizing investment limits and mandatory stock exchange listing. These rules are effective upon their publication in the Official Gazette.

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