News & Media 8th Feb 2022
Darshan Bora, partner, Economic Laws Practice (ELP) has been quoted in Business Today in their article titled ‘Can the ‘source of fund’ rule in Budget hinder non-VC investments in start-ups?’
Darshan says, “Once the proposed amendment is effective, in addition to the recipient of a loan or borrowing, even the lender may be called upon to provide justification about the nature and source of funds loaned by him. If the lender is unable to provide a satisfactory explanation, the amounts can be taxed as income in the hands of the recipient of the loan. It will increase the compliance burden on start-ups who receive loans or borrowings. This provision does not apply to amounts received from a venture capital fund or venture capital company”
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