The much awaited annual budget is here and it can be called a mixture of good and well, not so good for the upcoming startups and entrepreneurs in the country.
Among the good is the amendment to the Companies Act to enable registration of new companies in one day giving a major boost to the future ideas of the entrepreneurs.
The Finance Minister Arun Jaitley has also announced that the startups established during April 2016 to March 2019 can claim 100% deduction of profits for three out of the first five years. However, Minimum Alternative Tax will continue to be levied in these cases as well.
The next major announcement was on the issue of capital gains which will no longer be taxed on investments in regulated fund of funds for startups. Moreover, long-term capital gains for unlisted firms have also been lowered from three years to two years.
However, one thing which was being most expected but was entirely missing from the budget was the demand of removal of angel tax which is levied whenever a firm raises funds.
Mr. Alok Mittal, Co-founder, Indifi Technologies says,
This is a hard-working budget. We welcome the move to start rationalizing capital gains for investments in private companies, which will help create a level playing field relative to listed companies. However, the silence on the removal of angel tax has been deafening.
Among other tax relief measures, the budget has reduced the corporate tax rate for establishments with turnover less than Rs.5 crore lowered to 29% of surcharge plus cess. There are tax redemption measures introduced for MSMEs with turnover less than 2 crore.
To foster entrepreneurship among backward classes under Stand-Up India scheme, the government will partner with Dalit Indian Chamber of Commerce and Industry (DICCI) to set up entrepreneurial hubs for entrepreneurs from the backward classes.
It has also allocated Rs 500 crore for women and Scheduled Caste and Scheduled Tribe entrepreneurs.
This must become the year of entrepreneurship for SC/ST… This will benefit 2.5 lakh entrepreneurs,
In order to spread entrepreneurship education, entrepreneurship will be taught through MOOCS across the country. The training will be imparted in 2200 colleges, 300 schools and IITs and 50 vocational training centres.
The government has also set 1,700 Cr. for the development of 1500 multi-skill development centres. There is a proposal for amendment to the Motor Vehicles Act to enable entrepreneurship in the road transport sector.
In addition to above, the budget also announced some initiatives for Digital India.
These include proposals for expanding digital literacy mission to 6 crore households in next three years; a bill on using Aadhar for targeted delivery of financial services; e-platform for farmers; and maintaining a digital repository for all school leaving certificates and diplomas.