According to an official announcement, the lock-in period of three years from the date of acquisition of equity shares before transfer was being dispensed with.

It was further pointed out that the scope of permissible activities for venture-capital undertakings has been expanded to include the business of developing, maintaining and operating any infrastructure facility. The infrastructure facility has been defined to mean road, highway, bridge, airport, port, rail system, water supply and irrigation projects, sanitation and sewerage system, or any other public facility of a similar nature as may be notified by the Central Board of Direct Taxes (CBDT).

The Government has also decided that the investment stipulation of 20 per cent, 50 per cent and 80 per cent over a period of three years by the venture-capital undertaking under Rule 2Dof the Income Tax Rules will be dispensed with.

At present, income from dividends and long-term capital gains from both venture capital funds and companies are exempt from tax. The Government has further relaxed norms by amending Section 10(23F) of the Income Tax Act, 1961, by the Finance (No 2) Act, 1998, with effect from April 1, 1999 (assessment year 1999-2000 and onward), and amendment of Rule 2D of the Income Tax Rules, 1962, vide notification S.O. No. 1079 dated December 16, 1998, with effect from April 1, 1999.