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In a move that can help start-ups in the country deal with funding constraints, Commerce & Industry Minister Nirmala Sitharaman has said that senior officials from the Industry Department will meet officials from RBI, banks and venture capital funds to help them get funding.
She also hinted that the forthcoming Budget may have tax announcements for start-ups. “Tax benefits for start-ups can only be announced in the Budget,” Sitharaman said at an event to mark the first anniversary of the government’s `Start-Up India’ programme on Monday.
Other tax benefits The Ministry has suggested to the Finance Ministry to make older start-ups eligible for tax benefits by moving the cut-off date from April 1, 2016, and also increase the tax holiday period from three years to up to seven years.
The Department of Industrial Policy & Promotion (DIPP) has written to 100 CEOs in the country to help start-ups as part of their Corporate Social Responsibility obligation, DIPP Secretary Ramesh Abhishek said.
The DIPP Secretary will also meet senior officials from the RBI, banks and venture capital funds to discuss how to improve flow of funds to start-ups.
Easing labour laws He added that as many as 10 States had agreed to relax labour laws and environment laws for start-ups to ensure an easier regulatory regime.
Of the 1,368 applications received by the DIPP since the start-up policy was operationalised last year, 502 had the required documents and have been recognised as startups. These will be eligible for benefits such as exemption from various compliances, help to file IPR applications and some relaxation in norms of government procurement reserved for small enterprises.
However, just 111 applications met the criteria of having been set up after April 1, 2016, and could be considered for tax benefits. Of these only 8 start-ups actually qualified for tax benefits.
If the forthcoming Union Budget relaxes the criteria for qualification, the number of start-ups benefiting from the three-year income-tax exemption offered by the government could increase several-fold.
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