full text available at http://budget.allindia.com/
93. In some of the =91sunrise=92 sectors of the economy, the management =
is
adopting a policy of offering stock options and Sweat Equity, to their
employees. The tax implications of such transactions are somewhat ambiguo=
us.
Therefore, I propose in this budget to make certain amendments in the law=
,
to put it beyond doubt that such stock options will be taxed as a perquis=
ite
at the time of exercise of the option by the employee, and later as capit=
al
gains at the time of sale of the security. These amendments, I expect, wi=
ll
remove the grey areas which exist in the current law relating to such
transactions.
94. For boosting high-tech sectors and supporting first generation
entrepreneurs, there is an acute need for higher investment in venture
capital activities. Very recently we have relaxed the guidelines under th=
e
existing scheme by removing the requirement for time-bound investment and
minimum lock-in-period of funds. I am also harmonising the guidelines for
registration of venture capital activity with the Central Board of Direct
Taxes, with those for registration with the Security and Exchange Board o=
f
India. This will ensure uniformity in norms for registration with both th=
e
organisations. I am confident that these initiatives will increase the
attractiveness of the Venture Capital Scheme and induce high net-worth
investors to commit their funds to the =91sunrise=92 sectors, particularl=
y, the
Information Technology Sector.