Budget 2019 expectations: Startups want reduction in corporate tax, elimination of Section 56
Budget 2019 expectations: Given Modi government's push for startups during its first term in power, the small businesses have high hopes from the upcoming budget - the first of the returning government.
Budget 2019 expectations: Given Modi government's push for startups during its first term in power, the small businesses have high hopes from the upcoming budget - the first of the returning government. Swati Bhargava, Co-Founder, CashKaro believes that the government should reduce corporate tax rates from the current 30 per cent to around 20 per cent and the tax slabs for technology products and services should be reduced to between 12 and 15 per cent. "We also hope that Angel tax will be abolished for Government recognised start-ups in the upcoming budget. This is crucial for the sustenance of start-ups, especially SMEs. The relaxation of regulatory norms and compliances and the introduction of a single window clearance for start-ups would make the process more efficient," she told Zee Business Online.
Bhargava added that government needs to introduce policies that offer more support to the start-up community. She said that India is currently the melting pot of brilliant ideas and concepts which makes a start-up friendly budget the need of the hour. "Some good examples to follow are countries like Singapore that work actively towards benefiting start-ups by reducing corporate taxes, relaxing compliances, reducing rate of TDS and keeping paperwork investor friendly. In the same vein, others like the UK offer tax relief to angel investors for investing in start-ups via schemes like EIS," she added.
Meanwhile, Saurabh Srivastava, Chairman & Co-founder, Indian Angel Network appreciated the hard work done by DPIIT/CBDT and the Angel tax notification, which has alleviated start ups’ problems to a large extent. However, he said that the forthcoming Union Budget should allow further alleviation of regulatory friction impeding the growth of start-ups and angel investors.
"Moreover, Section 56 should be eliminated completely to encourage Angel investment in MSMEs. While DPIIT has uplifted start-ups in its February notification, MSMEs in general (which do not meet the DPIIT definintion), have been left out. Further, we seek clear messaging and simplification of executive processes from the Government regarding other taxes in which start-ups are usually caught up with," he said.
He also welcomed the President’s ambition regarding of 50,000 start ups by 2024 and hope we will cross it even earlier.
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