Venture Capital Schemes are limited to fifty investors and permit investment by persons meeting the prescribed minimum threshold or by Accredited Investors. Employees, directors and designated partners of the Fund Management Entity may invest subject to a reduced threshold, while Accredited Investors are exempt from minimum investment requirements. Joint investors must each meet the applicable minimum contribution, with specified family relationships permitted to satisfy the general threshold on an aggregate basis. Registered Fund Management Entities may use restricted schemes to target more investors or accept lower application sizes.

Delhi Authority for Advance Ruling directed the System Analyst, EDP Cell of the Department of Trade and Taxes, to upload a specified advance ruling on the GST portal. The direction concerns Advance Ruling No. 13/DAAR/2025 dated 1 October 2025, issued in relation to M/s Young Optimistic Transport Solutions Private Limited. The upload is intended to place the ruling in the public domain, with intimation to the concerned branch after completion.

Placement memorandum filing permits a Fund Management Entity to launch Venture Capital schemes through private placement under the green channel. Investor subscriptions may begin once the Authority communicates that the placement memorandum has been taken on record, subject to incorporation of any comments. The memorandum remains valid for twelve months, within which the FME must achieve the prescribed minimum corpus and declare first close. A one-time six-month extension is available on payment of the specified fee, and material changes must be immediately reported.

Venture Capital Schemes under Part A must be filed as a venture capital fund within Category I Alternative Investment Fund. A scheme filed under this framework may be construed as a venture capital fund for purposes of the Income Tax Act, the Foreign Exchange Management Act, and related rules, regulations, circulars, notifications, guidelines, or other relevant statutes.

Regulation 17 requires a Fund Management Entity to appoint prescribed fiduciaries before filing a scheme document. Companies require a Board of Directors, limited liability partnerships require Designated Partners, and trusts require Trustees, including the board of a trustee company where applicable. All fiduciaries must meet fit and proper requirements. Appointment of fiduciaries for retail schemes requires prior approval, and fiduciaries must comply with the applicable Code of Conduct and obligations.

Surrender of registration permits a Fund Management Entity to apply to the Authority for voluntary surrender of its certificate of registration. The surrender becomes effective only when accepted by the Authority, and filing an application alone does not terminate registration.

Registration of a Fund Management Entity remains valid for the period specified by the Authority, unless earlier suspended, cancelled, or surrendered and taken on record by the Authority.

Registration applications for Fund Management Entities may be refused only after deficiencies are communicated and the applicant is allowed 30 days to rectify them. If the deficiencies are not rectified to the Authority's satisfaction within that period, the Authority may refuse registration and must communicate the refusal with reasons.

Registration of a Fund Management Entity is conditional on regulatory compliance by the entity and its relevant officers and personnel. The entity must promptly notify the Authority of material changes in previously provided information or particulars affecting its registration. A registered entity cannot change its registration category without prior approval from the Authority.

Grant of Certificate of Registration as a Fund Management Entity may be made by the Authority after receiving all required information and being satisfied that the applicant qualifies under the appropriate category. Grant is subject to payment of the applicable registration fee.

Furnishing of information for Fund Management Entity registration permits the Authority to seek further information or clarifications about the applicant, the fund, proposed fund management activities, or related matters when considering a registration application. The applicant may be required to appear for personal representation, and the Authority may inspect the applicant's office before granting a certificate of registration.

Infrastructure requirements for registration of a Fund Management Entity require adequate office space, equipment, communication facilities and manpower to effectively conduct activities in an IFSC. These facilities must be commensurate with the scale of its IFSC operations. The office must be dedicated and secured, and access must be restricted to authorised persons of the Fund Management Entity.

Registration of a Fund Management Entity requires the applicant and its principal officers, management personnel and controlling shareholders to remain fit and proper at all times. The standard requires fairness, integrity, financial integrity, reputation, character and honesty. Disqualifications include convictions or pending proceedings for specified offences, insolvency, wilful default, regulatory recovery action, market-access restrictions, malfeasance-related winding-up, fugitive economic offender status and other specified grounds. Persons declared not fit and proper remain ineligible for registration until they satisfy the prescribed criteria.

Registration as a Fund Management Entity requires continuous compliance with applicable minimum net worth requirements, including the amount specified in the Second Schedule or otherwise specified by the Authority. A branch operating in an IFSC may maintain the required net worth at the parent-entity level, provided the parent ensures adequate funds for the branch's daily operations. Net worth required for FME activities must remain separate from and additional to requirements applicable to other activities within or outside the IFSC.

Fund Management Entities must designate an IFSC-based principal officer responsible for overall fund management, risk management and compliance. Registered FMEs require a compliance officer, while Registered FMEs (Retail) must appoint an additional fund-management key managerial person before filing the first retail scheme or ETF offer document. FMEs crossing the prescribed assets-under-management threshold must appoint an additional fund-management key managerial person, subject to specified continuation and government-related investor exceptions. Principal officers and key managerial personnel must meet prescribed qualification and experience standards, and staffing, certification, portfolio proposal, and appointment-change requirements apply.

Fund management entity registration requires a sound track record and a general reputation for fairness and integrity. Retail entities may qualify through prescribed collective asset-management and investor experience of the entity, its holding company or subsidiaries, or through qualifying experience of controlling persons together with prescribed net worth. Alternative criteria may support innovative fintech companies. Non-retail and authorised entities require employees with prescribed relevant experience.

Interest disallowance under Section 36(1)(iii) is not sustainable merely because borrowings exist where sufficient interest-free own funds exceed interest-free advances and no nexus between borrowed funds and the advances is established. Interest-free advances made in an earlier year were treated as funded from the assessee's own funds, particularly as no disallowance arose in that year and there were no short-term borrowings in the relevant years. The claimed interest expenditure therefore remained allowable. Delay in filing the appeals was condoned because the former professional did not communicate the appellate orders, no physical copies were served, and the delay was bona fide.

Registration of a Fund Management Entity in an IFSC requires constitution as a company, LLP, branch, or another Authority-permitted form. A Registered FME (Retail) cannot be an LLP or branch. Branches are limited to FMEs already regulated for similar activities and must be ring-fenced by the parent, supported by continuously earmarked minimum capital. Constitutional documents must authorise fund management. A Registered FME (Retail) requires at least four directors, at least half of whom must be independent and unassociated with the FME.

Fund Management Entity registration requires an applicant seeking a certificate of registration to satisfy the eligibility requirements and conditions prescribed in the relevant chapter. Compliance with those chapter-specific requirements and conditions forms the basis for obtaining registration under the International Financial Services Centres Authority (Fund Management) Regulations, 2025.

Fund management business in an IFSC requires prior registration as a Fund Management Entity. Registration applications must contain prescribed declarations, undertakings, documents and fees, and incomplete applications may be rejected. Authorised FMEs may operate specified venture capital and family investment activities. Registered FMEs (Non-Retail) may operate restricted schemes, provide portfolio management services and manage private-placement investment trusts. Registered FMEs (Retail) may operate retail schemes, manage publicly offered investment trusts and launch exchange traded funds, while also undertaking activities permitted to lower registration categories.