1. Taxation- Venture Capital Fund Taxation of Venture Capital FundsAs per the amendment to Section 10(23PB) of the Income Tax Act, 1961 (“ITA"), the tax exemption status for VCFs has been restored for investments in venture capital undertakings (‘VCU''), irrespective of the sectors in which the VCU is engaged. Incidence of tax at the hand of the Investors Any income earned by the scheme for periods commencing from April 01, 2012 from its investments in my VCU shall not be taxed in its hands. Such income shall be taxed in the hands of its investors. 1. On accrual basis under section 115 U of ITA, i.e. as and when accrued by the VCF, or2. On accrual basis (i.e. at the end of the year, income accrued to the fund and not distributed to the Investor’s shall be taxable in the hands of contributors). If the Scheme docs not distribute such income to the investors, it shall be deemed to have credited to the Investors on March 31, 2013 i.e. the last day of the relevant previous year and the Investors shall be required to pay tax accordingly on such deemed receipt basis. Characterization of the distributions received The nature of the income earned by the Investors would be identical to the nature of income earned by the scheme. Thus, if the scheme earned income the nature of dividends, interest or capital gains, the investor would be required to bifurcate their share of income in to dividend, interest or capital gains, respectively.

2. Taxation- Venture Capital Fund Rates Of Taxes Applicable To The Different Categories Of Income