The venture capital industry has demanded tax concessions for specific sectors and better clarity on some specific policies governing the VC industry in the upcoming Budget to help boost “innovative” firms in India.
“As we approach the Union Budget for 2010, we urge the ministry to clarify or improvise some specific policies governing the VC industry,” said Mr Harshal Shah, CEO, Reliance Venture Asset Management. Mr Shah further said that the current Foreign Ventur e Capital Investor guideline is unclear about investing in sectors beyond a few shortlisted ones namely biotechnology, nanotechnology, IT hardware and software, research and development for new chemical entities, seed research, dairy, poultry, bio-fuels and large hotel-cum-convention centres.
“It is time that the ministry streamlines these guidelines and triggers more investment by introducing encouraging tax implications beyond the above stated sectors,” Mr Shah added. Mr Rohit Madan, Research Director, VCCEdge -the financial research platfo rm of VCCircle.com-believes that “the 2010 budget should lay the foundation for the introduction of the Direct Tax Code in April 2011.” The budget could make things easier by restoring the pre-2007 pass-through benefits to VCF’s for all sectors, Mr Mada n added. – PTI
Source: Business Line