Nirmala Sitharaman signals start-ups may get tax benefits in Budget 2017
Commerce and Industry Minister Nirmala Sitharaman on Monday indicated that start-ups may get additional tax benefits in the forthcoming budget, to be unveiled on February 1.
The ministry has already suggested the Finance Ministry to consider raising tax holiday for start-ups to seven years from the current three years to encourage budding entrepreneurs.
Sitharaman said tax and tax-related matters always come from start-ups as "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".
She said that all the suggestions of the entrepreneurs have been compiled by the ministry and given to the Finance Ministry.
Asked about raising the tax holiday for seven years, she said, "That suggestion also we have given to the Finance Ministry. We have to wait."
Tax related (benefits) will have to come only through the budget, she said, adding that suggestions with regard to exempting start-ups from minimum alternate tax (MAT) have also been forwarded.
Further she said the government is committed to removing legislative hurdles, if any, being faced by them.The Centre is also involving local authorities, including states, to help the budding entrepreneurs in terms of local taxes among others.
The minister also asked Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek to organise a meeting with Reserve Bank of India (RBI), Small Industries Development Bank of India (SIDBI), banks and VCs to deliberate on funding related issues.
Sitharaman was speaking at the first anniversary of Start Up India in New Delhi.
Speaking on the occasion, Abhishek said the start-ups need more support in terms of taxation and infrastructure. "We need to do more for them and we are working with the Finance Ministry (on tax related matters)," he said, adding that state governments too should extend full support to promote the units in the country.
The DIPP secretary said that although several states are coming out with specific policies related with start-ups, more needs to be done by the states.
"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," Abhishek said.
The department, he said, is also working on extending easy funding to start-ups and providing a suitable environment.
Further, Sitharaman asked the start-ups to work on areas like animal husbandry, veterinary science, waste management and aggregation of fuel.
"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," she said.
The government launched the Startup India initiative in January last year to promote the budding entrepreneurs in the country.
The initiative lays down the road map for creation of a conducive ecosystem for the growth of start-ups.
As part of the ongoing initiative to facilitate the ecosystem, a virtual hub will soon be rolled out. The hub will serve as a one-stop solution platform for all such queries and also a meeting ground for investors, incubators and start-ups.