new delhi the government may soon come out with new investment norms for venture capital vc private equity pe and hedge funds to make their operations transparent and create a levelplaying field for both the domestic and foreign playersjoint secretary in the finance ministry kp krishnan said government is likely to revisit norms for vc funds and talks have already been held with the market regulator sebi towards this endefforts are also on to create a legal framework so that venture fund investments should not land in a few sectors only and equitable distribution takes place the government is specifically worried about huge fund inflow in sectors like real estate which has affected investments in other hitech sectors like software and biotechnology at the same time it has led to appreciation in the prices of real estate in the country government it is learnt is considering to give some new tax incentives to venture funds and pe funds to invest in highrisk areasventure funds invest in the equities of high growth companies to earn hefty returns at present foreign funds have an advantage over their domestic counterparts under the existing tax system of the countryhead of financial services at pwc india punit shah said foreign vc funds are at an advantageous position against domestic ones while investing other than nine hitech sectors like biotechnology software and nano technology government gives tax sops no capital gains tax on profit to domestic funds if they invest in these nine sectors but not othersbut sectors like real estate is not included in this list therefore when a domestic venture fund invests in an unlisted real estate company he pays tax on the capital gains earned while exiting the company shah addedbut foreign funds registered in tax heavens like mauritius and cyprus do not pay any tax on the capital gains earned such transaction because of the double tax avoidance treaty the new initiative according to krishnan would ensure that same tax rule apply on both foreign and domestic vc pe funds to achieve a levelplaying field besides the move will also make the investments by these entities transparent for this purpose the government would like to redefine vc pe and hedge fundson its part sebi will make it mandatory to register vcs and pes after compiling data about their investments in sectors like real estate ites education sni director tc nair said that at present the market regulator has no definite source about the exact investments of pes and vcs