Economy

Budget 2016-17: Slew of benefits under consideration for start-ups

| | Updated on: Jan 08, 2016

Nasscom had submitted its pre-Budget recommendations to the Finance Ministry seeking exemption of start-ups and e-commerce from direct and indirect taxes, including minimum alternate tax

Start-ups may get a booster in Arun Jaitley’s Budget with the Finance Ministry considering extending tax benefits on capital gains from securities of such firms.

In fact, the Prime Minister Narendra Modi may also announce some of the benefits on January 16, when he would also unveil the Start-up Action Plan, sources told BusinessLine .

“Some suggestions have gone to the Finance Ministry on exemption of income tax on capital gains invested in securities of new start-ups from the IT ministry, and some decision will be taken closer to the Budget, based on those points,” a government official said.

The government is looking at measures to support the start-ups through easier funding/loans, said another official.

“Additionally, the industry has also sought service tax on cash basis for start-ups instead of the current accrual basis as it will help them to have more ready cash,” the official said.

The official said there have many demands that have come from various stakeholders for benefit of start-ups. For example, IT industry body Nasscom also had submitted its pre-Budget recommendations to the Finance Ministry on Wednesday, asking exemption of start-ups and e-commerce from direct and indirect taxes, including minimum alternate tax.

“Policy regulations such as ease of compliance, reliance on self-certification instead of audits, tax exemptions for start-ups will allow entrepreneurs to devote their time, energy and resources to build upon their innovative ideas,” R Chandrashekhar, President, Nasscom, said.

With the number of tech start-ups in India growing over 40 per cent over the last year, these start-ups can potentially develop innovative solutions to address the development needs of the country as they focus on development solutions for health, infrastructure and energy amongst others, he added.

Published on January 19, 2018

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