WEALTHMUNSHI · PRACTICAL INVESTOR GUIDE Category I AIFs: the investor guide Understand SEBI rules, eligible investors, the ₹1 crore threshold, tax treatment, liquidity, and due diligence. Read the full Category I AIF guide on WealthMunshi

Start with the five facts that matter Category I AIFs focus on start-ups, SMEs, social ventures, and infrastructure. They are generally close-ended and invest primarily in permitted unlisted assets. The ordinary minimum investment is usually ₹1 crore. Tax is generally passed through to investors, subject to the character of income. There is no official SEBI ranking of the “best” manager or platform. Use the full WealthMunshi article as a practical reference Category I AIF · Investor guide 2

WHAT “CATEGORY I” MEANS Category I is a developmental mandate, not a performance label Category I AIFs are registered under the SEBI (Alternative Investment Funds) Regulations, 2012. Venture capital and early-stage companies Small and medium enterprises Social enterprises Infrastructure and other development-oriented areas Sub-categories include Venture Capital Funds, SME Funds, Social Venture Funds, Infrastructure Funds, and Angel Funds. Category I AIF · Investor guide 3

Category I, II, and III serve different purposes Category I Developmental, early-stage, SME, social, and infrastructure exposure. Category II The broader private-market residual, including private equity, private credit, and real estate. Category III Diversified or complex trading strategies, including listed securities and possible leverage. Category I and II are generally close-ended and typically receive pass-through treatment. See the category comparison from Finnovate. For tax context, see the AIF taxation explainer from Planify. Category I AIF · Investor guide 4

ELIGIBILITY AND TICKET SIZE Who can invest, and why ₹1 crore is the starting point ₹1 crore Ordinary minimum investment per investor Resident individuals, HUFs, NRIs, companies, LLPs, trusts, and institutions may invest if they meet the fund’s eligibility rules. ₹25 lakh exception for employees, directors, managers, or sponsors. Angel Funds: separate thresholds and eligibility rules. Accredited investors: additional flexibility may apply under updated SEBI criteria. See the Planify guide to the ₹1 crore minimum · 2025–2026 amendment discussion · WealthMunshi’s note on AIF minimum-investment requirements. Category I AIF · Investor guide 5

How the subscription process actually works Review the fund’s private placement memorandum.1. Sign the contribution agreement.2. Commit capital and respond to draw-down notices.3. Evaluate strategy, fees, governance, liquidity, and reporting before signing.4. Online platforms may distribute AIFs, but the legal relationship remains with the SEBI-registered AIF and its manager. A close- ended Category I scheme does not have a mutual-fund-style exchange-traded buy button. Category I AIF · Investor guide 6

Listed companies are not the core use case Category I schemes must deploy a substantial portion of corpus, commonly two-thirds or more subject to the exact regulation and sub- category, into permitted unlisted securities. Limited listed holdings may be possible within scheme documents and SEBI limits. Regular listed-market trading is mainly associated with Category III. Do not evaluate Category I like a listed-equity product. Category I AIF · Investor guide 7

Tax usually follows the investor, not the fund Category I and Category II AIFs are generally treated as pass-through vehicles: capital gains, dividends, interest, and other income retain their character and are taxed in the investor’s hands. Tax point What to understand Business income Important exception; it may be taxed at fund level. Distributions May attract TDS. Investor status Exact rates depend on income character and status, including resident or NRI status. Confirm the current year’s rules with the Income Tax Department and review the fund’s reporting before filing. Category I AIF · Investor guide 8

The real risks are illiquidity, draw- downs, and false certainty Illiquidity Expect a long lock-in and a draw- down schedule, not open-ended liquidity. False certainty Do not rank managers from advertising or past IRR alone. Past performance is not a forecast. Investor-specific risk NRIs should assess FEMA and tax-residency effects. Do not assume leverage is permitted for investment purposes. Category I exposure is long-dated, illiquid, and ticket-size constrained. Return to the full WealthMunshi Category I AIF guide Category I AIF · Investor guide 9

BEFORE YOU SIGN A practical decision checklist before you sign Mandate: Does the strategy genuinely fit Category I’s developmental purpose? Eligibility: Do you meet the ordinary or exception threshold? Documents: Have you read the PPM and contribution agreement? Tax: Do you understand pass-through treatment and the business-income exception? Manager: Have you checked registration, team, fees, governance, and reporting? Fit: Can your portfolio absorb illiquidity and draw-down risk? For investor and tax-planning context, see the investor-eligibility guide from Vinod Kothari and WealthMunshi’s full Category I AIF reference. Category I AIF · Investor guide 10