While every industry is looking forward to Budget 2017, scheduled to be unveiled on February 1 by Indian Finance Minister, Arun Jaitely, here’s some good news coming the Startup industry’s way.
A recent statement made by India’s Commerce and Industry Minister Nirmala Sitharaman indicates that startups in India might be getting additional tax benefits in the forthcoming budget. Talking about how tax and tax related matters affect startups and their journeys, Sitharaman said, “it makes tangible difference to a start-up, and in that some work has happened, more to be happening. Let’s see what this budget is going to offer”.
A few weeks back, we had also reported about how the Commerce and Industry ministry had suggested the finance ministry to consider raising the tax relief window for startups from the current 3 years period to 7 years so as to encourage more and more entrepreneurs to test the startup waters.
Sitharaman also mentioned that her ministry keeps on receiving suggestions on tax and tax-related matters from the startups, which it meticulously compiles and hands over to the finance ministry. She also mentioned that she is sure that the finance ministry will look into the suggestion the Commerce and Industry ministry gave on raising the tax holiday for startups. Emphasising on the procedure, Sitharaman said that all the tax related benefits will have to come through the budget only. She also added, that her ministry has also put forth suggestions with regards to freeing startups from the obligation of MAT (minimum alternate tax). Further, the Commerce and Industry Minister also said that the government at the centre is making sure that it removes all the legislative hurdles being faced by the startups. The Centre has in fact also got the local authorities, including the states, involved in helping the budding entrepreneurs in all the local tax related issues among others.
Speaking at the first anniversary of Start Up India in New Delhi, Sitharaman also mentioned that she had recently asked DIPP secretary Ramesh Abhishek to arrange a meeting with RBI, SIDBI, banks and VCs so as to deliberate with them all the funding related issues being faced by the startups.
Speaking on the occasion, Abhishek said that the Indian startups are currently in need of more support in terms of taxation and infrastructure from the central government. He also added that the state governments should also join-in in providing full support to the units in the country. While a lot of states have already come up with startups specific policies, more states need to follow suit. “We are also involving corporates and banks to support start-ups… nothing is casting stone and we can rework at the definition of start-ups,” said the DIPP secretary.
Highlighting his department’s efforts towards the Indian startup ecosystem, Abhishek mentioned that the DIPP is currently meticulously working towards extending easy funding facilities to startups in the country, in addition to providing them with a suitable environment.
During the event, Sitharaman encouraged the startups/entrepreneurs in India to focus their interests on areas like waste management, aggregation of fuel, veterinary science and animal husbandry etc. and help in making the existing cities smart. She said, “These are the areas where we want start-ups to work on. I want them to look at how we can make our existing cities smart.”
The Startup India initiative was launched last year by the Modi government to encourage entrepreneurship in the country. Launched by the Prime Minister himself, the much-talked about initiative laid down the blueprint for creation of a more conducive ecosystem for the growth of startups in the country. As a part of the initiative, a virtual hub that will serve as a one-stop solution platform for all startup related queries in addition to doubling up as a meeting ground for investors, incubators and startups is also in the process.
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