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CS Executive · Capital Market and Securities Laws · Collective Investment Schemes

Vistara Infra InvIT breaches SEBI regulations for infrastructure investment trusts and earns gains of Rs 5 crore from the breach. Compared with a Section 15D default by a mutual fund, which statement is correct about the penalty ceiling?

Section 15EA governs InvITs, with a maximum of one crore rupees or three times the gains made, whichever is higher. Three times Rs 5 crore is Rs 15 crore, so the ceiling is Rs 15 crore, unlike the fixed one crore cap under Section 15D.

  1. ASection 15EA applies, with a ceiling of one crore rupees or three times the gains, whichever is higher, so Rs 15 croreCorrect
  2. BSection 15D applies, with a fixed ceiling of one crore rupees
  3. CSection 15EA applies, with a ceiling of one crore rupees or three times the gains, whichever is lower, so one crore rupees
  4. DSection 15D applies, with a ceiling of three times the gains

Explanation

Infrastructure investment trusts fall under Section 15EA, not Section 15D. Its ceiling is one crore rupees or three times the gains, whichever is higher. Three times Rs 5 crore is Rs 15 crore, which exceeds one crore, so the ceiling is Rs 15 crore. Section 15D has only the fixed one crore cap.

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