18 Questions
What is a key feature of Venture Capital investments?
Equity participation and capital gains
Which stage of financing involves providing capital for product development, R&D, and initial marketing?
Early stage financing
In which stage of financing does the firm acquire another company for further growth?
Acquisition financing
What type of financing enables operating groups or investors to acquire an existing product line or business?
Management buyout financing
Which type of capital gains tax applies to profits made on investments held for a short period?
Short-Term Capital Gains Tax
What feature is NOT characteristic of Venture Capital investments?
Quick Liquidity
What is the typical percentage of profits paid to the VCF's management company as a performance incentive?
20%
Which of the following is NOT an exit option for Venture Capital to cash out their investment?
Mutual fund investment
What is one disadvantage of Venture Capital financing?
Loss of founder's autonomy and control
Which party receives an annual management fee up to 2% of the committed capital in a Venture Capital Fund?
General partners
What type of tax is paid on profits earned from the sale of investments held for less than a year?
Short-term capital gains tax
Which of the following is NOT an advantage of Venture Capital financing?
No obligation to repay the money
What percentage of profits have strong limited partners in top-tier venture firms commanded in recent times?
25% to 30%
Under Indian Tax laws, how are exit gains on the sale or buyback of securities taxed for beneficiaries of the fund?
Taxed at a progressive rate based on the profit amount
What is the tax rate for short-term capital gains for an individual resident in India?
30.90%
When there are long-term capital gains from listed shares in India, subject to STT, what is the tax implication for residents and non-residents?
No tax for residents; 15% for non-residents
What is the tax rate for long-term capital gains on unlisted shares for a non-resident in India without indexation benefit or subject to off-market transactions?
20.60%
When are short-term capital gains considered to be taxed at the marginal rate of tax?
When the investor is a resident in India
Test your knowledge on venture capital taxation laws, including carried interest, pass-through benefits, and tax implications for fund beneficiaries. Explore topics such as exit gains on the sale and buyback of securities.
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