Union Budget 2017-18: There will be no Mega deal for start-ups this year announced by Arun Jaitely : For the campaign “Start-up India, Stand-up India’, this year’s Budget did not announce any major measure to allure more people into entrepreneurship. Start-ups require government initiatives to create favourable to the environment rather than tax holidays, experts opined.
The Budget 2017 also said that there was a strong demand for abolition of MAT. It is not practical to remove or reduce MAT at present. However, in order to allow companies to use MAT credit in future years, the Budget proposed to allow carry forward of MAT upto a period of 15 years instead of 10 years at present.
Founder and CEO of Rubique – Manavjeet Singh said that the exemption from MAT has not been allowed and an enhanced carry over the period will not really help start ups from a cash flow perspective.
Partner Direct Tax PwC India – Abhishek Goenka said that most of the start-ups are not making profits. So the tax holidays are redundant. The government should have taken measures to create more favourable environment to build the start-up eco-system and incubators.
Co-founder at Indian Angel Network – Saurabh Srivastava said that the investors in start-ups also wanted some incentives in making high-risk investments. It would have been great if capital gains for startups were aligned with listed companies and there was some announcement regarding the regressive sec 56 as it is regressive and prejudicial and impedes the growth of innovative startups & job creation.
In order to make Micro Small and Medium Enterprises(MSME) more viable and also to encourage firms to migrate to company format, the Budget proposed to reduce the income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent. This will be beneficial for start-ups as well.
Goenka further said that there was an expectation of an across the board reduction in the rate. Instead, a calibrated approach has been adopted and the reduction is only for companies with turnover of less than Rs 50 crore. I expect that there will be some safeguards against unnecessary arbitrage opportunities by splitting businesses.