Section 115U of ITA, 1961 : Section 115U: Tax On Income In Certain Cases

Explanation using Example

Imagine an investor, John, who has invested in a Venture Capital Fund (VCF), which in turn invests in various startups. In the financial year, the VCF earns profits from its investments in these startups and decides to distribute these earnings to its investors, including John.

Under Section 115U(1) of the Income-tax Act, 1961, the income distributed to John by the VCF will be taxed in John's hands as if he had made direct investments in the startups. This means John must pay taxes on these earnings at the applicable rate.

According to Section 115U(2), the VCF is required to furnish a stateme...

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