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NASSCOM, the voice of the IT industry, has asked for special dispensations for tech starts up in the new Startup Act that the government is drawing up to facilitate entrepreneurship in the country.
Speaking to Business Line at the sidelines of the launch of the Global Entrepreneurship Week, R. Chandrashekhar, President, NASSCOM said that the industry association had sent a set of recommendations to the DIPP, which is drawing up the new comprehensive policy framework for start-ups. The policy being drawn up after Prime Minister Modi’s Independence Day clarion call of Start-up India, Stand Up India, was initially expected to be legislated sometime in December but may now only be seen in January.
“We have suggested certain additional dispensations for tech start-ups as by and large they deal with virtual products and are typically small companies, with single digit employees. Also their failure rate is higher,” said Chandrashekhar.
By additional dispensations, he clarified, he meant exemptions from acts such as the environment tribunal act, green tribunal act, building and other construction workers act and so on since these are not applicable for tech based companies. Also he said along with the Ease of Doing Business, the Startup Act should facilitate Ease of Closure for companies that shut down as business risks are higher in this segment.
Tax Treatments
Nasscom has also recommended a more favourable tax treatment towards investors who fund start-ups. For instance, it suggests removal of angel tax for investments up to ₹10 crore in a single round where investment by an individual does not exceed ₹5 crore in that round. Also, it has asked that investors in start-ups should be exempted from capital gains from income tax if they reinvested in new start ups.
Earlier, flagging off the GEW event celebrations, which will see hackathons and panel discussions across the country, Chandrashekhar said, “The Start-up India, Stand up India initiative indicates the desire of the government to stoke the fire of entrepreneurship and drive the development agenda in country. We hope the Startup Act will come up with a strong policy framework to make it easy for entrepreneurs to do business and investors to exit.”
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