Finance Minister Arun Jaitley presented his third Union Budget. Budget 2016 seems to be a bitter tonic for middle class people, while for the starts up its the start of “Ache Din”. Soon after the budget, start up founders and experts reacted positive towards budget. See what founders are talking about the budget .
Budget 2016 Reactions
Mr. Sunil K Goyal, Founder and CEO, YourNest. Highlighted the impact of budget on various industry
- The period for Long Term Capital gains on unlisted securities is reduced to 2-years from 3-years.
- Capital Gains can now be invested in eligible start-ups and specified Funds. Hopefully it shall include Category 1 Venture Capital Funds too.
- Tax exemption for eligible start-ups for 3 years with a MAT is a sign of hesitation even in the case of highly innovative start-ups.
- No relaxation on cash flow of start-ups on TDS in particular is a miss. Start-up tax is the biggest pain of our start-ups. Silence on start-up tax on equity funds raised at a premium is the biggest disappointment.
- A special tax rate of 10% on patents developed and registered in India shall encourage our start-ups to file for Patents in India too.
For new manufacturing units:
- A base tax rate of 25% is a step that boosts our confidence in long-term tax rates in the country.
For encouraging Venture Capital activity the Union Budget:
- Has removed the mandatory 10% withholding tax on exempt income of non-resident investors
- Whereas losses in the investment made by AIF continue to be not available for set-off
Nidhi Agarwal, Founder and CEO, KAARYAH also said
I am happy that the finance minister has recognized startups as a key partner in government programs and progress of the nation. The government has also kept the promises it made at Startup India and has clearly shown an intent to empower entrepreneurs across the country. The 3-year tax holiday, Rs. 500 crore allocation for Standup India as well as easy and quick registration of startups are all steps in the right direction. However, it would have been great if contradicting provisions in the Income Tax Act and Indian Companies Act were also addressed