Section 10(23FB) → Section 12
Income of Venture Capital Company or Venture Capital Fund
Quick Answer
Section 10(23FB) of the Income Tax Act, 1961 (Income of Venture Capital Company or Venture Capital Fund) corresponds to Section 12 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 10(23FB)
In the 1961 statute, Section 10(23FB) deals with income of venture capital company or venture capital fund. Exempts the income of a VCC or VCF from investments made in a venture capital undertaking.
The new code maps this to Section 12: the provision is retained and renumbered as Section 12 of the Income-tax Act, 2025, applying from 1st April 2026. Retained but aligned strictly with the Category I AIF pass-through framework under Section 115UB.
On the ground, changes to Section 10(23FB) carry a High impact. Essential for the Startup funding ecosystem.
Sec 10(23FB)
Provision Summary
Exempts the income of a VCC or VCF from investments made in a venture capital undertaking.
Sec 12
Provision Summary
Retained but aligned strictly with the Category I AIF pass-through framework under Section 115UB.
Key Changes & Highlights
- Harmonized with Alternative Investment Fund (AIF) regulations.
Related Sections
Frequently Asked Questions
What does Section 10(23FB) of the Income Tax Act 1961 deal with?
Section 10(23FB) of the Income Tax Act, 1961 covers income of venture capital company or venture capital fund. Exempts the income of a VCC or VCF from investments made in a venture capital undertaking.
Where does Section 10(23FB) of the ITA 1961 go under the Income-tax Act, 2025?
Section 10(23FB) of the Income Tax Act, 1961 maps to Section 12 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained but aligned strictly with the Category I AIF pass-through framework under Section 115UB.
Why does the change to Section 10(23FB) matter for taxpayers?
The transition impact for Section 10(23FB) is rated High. Essential for the Startup funding ecosystem.
What are the key changes to Section 10(23FB) under the Income-tax Act, 2025?
Harmonized with Alternative Investment Fund (AIF) regulations. These points are specific to Section 10(23FB) (Income of Venture Capital Company or Venture Capital Fund).
Disclaimer: This mapping of Section 10(23FB) (Income of Venture Capital Company or Venture Capital Fund) to Section 12 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 10(23FB) is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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