Start-ups celebrate initiatives taken by govt in Budget 2017
Jaitley announced that for small businesses with an annual turnover of Rs 50 crore they will now have to pay 5% less income tax. This brings down their income tax level to 25%.
Start-ups had a lot to celebrate after the announcement of the Union Budget 2017 by Finance Minister Arun Jaitley. For starters, he announced that for small businesses with an annual turnover of Rs 50 crore they will now have to pay 5% less income tax. This brings down their income tax level to 25%.
Jaitley further said that for the purpose of carry forward of losses in respect of start-ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues. Start-ups will also get the profit (linked deduction) exemption available to the start-ups for 3 years out of 5 years is now changed to 3 years out of 7 years.
Apart from this, Jaitley proposed to double lending target for small business loans. He said that the government will spend Rs 2.44 lakh crore for small business loans.
Speaking about the decisions taken by the government in the Budget Archit Gupta, CEO and Founder, ClearTax, “The govt has proposed to abolish FIPB. This is a significant move for startups eco-system. The govt has proposed automatic FDI approval route. This is also a move towards ease of business - as obtaining FIPB approvals involved time and effort. This is an excellent move for removal of lengthy and time-consuming approval processes. We are awaiting further details on this.”
Ajith Mohan Karimpana, CEO and Founder, Furlenco said, “Specifically coming to the extension of tax break for startups to 7 years, this change was definitely required as there are very few startups that actually generate profits in first 5 years of their existence; reduction in corporate tax rate for entities with turnover less than Rs 50 crore may not be of much use for new age startups that take 5-7 years and much larger turnover base to turn profitable.”
Dushyant Jani, Founder and CEO - Mobclixs Technologies said, “Finally, the anticipation has come to an end with the unfolding of the Union Budget 2017-18 and we welcome the Finance Minister’s decisions on the various policies and tax saving schemes. Further, the newly announced income tax slab of 25%, for the income bracket of Rs. 50 crores for start-ups, will help entrepreneurs in the efficient allocation of funds. However, the detailed announcement on the GST bill is still on the charts and companies now are eagerly awaiting the same.”
Arun Bhati, COO & Founder, Orahi said, “This budget has got some good aspects for startups, fortunately in line with our expectations, extenstion of profit linked deduction from 3 years to 7 years is a good move. Also tax reduction for companies below Rs25 crore and carry forwarding losses, if the founder remains involved, are excellent steps. Focus on digital infrastrcutre and cash less economy is also going to provide impetus to the growth.”
Anurag Avula, CEO and Founder, Shopmatic said, “What is interesting to note is the government’s interest in start-ups and on energising youth and creating jobs. The Profit linked-deductions for start-ups that has been reduced to 3 years out of 7 years, will certainly ease the process. In all its completeness we are quite pleased with the start-up and SME announcements. We believe that the fresh moves made will cultivate the rising upsurge of tech and digital initiatives to further energise the GDP of our nation.”