The recent Indian Union Budget has clarified that income from the transfer of Category I and II Alternate Investment Funds (AIFs) will be taxed as capital gains, effective from April 1, 2026. Investors will face capital gains taxes at redemption, while no tax applies at the fund level. Additionally, a new Fund of Funds (FoF) with an allocation of ₹10,000 crore aims to bolster venture capital and private equity, especially in deep tech. Industry leaders support these initiatives, emphasizing the need for both equity and debt financing to foster innovation and sustain startup growth in India’s evolving economic landscape.