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Union Budget leaves many in the fledgling sector disappointed as they expected more specific measures
More than a month after the ‘Start Up India, Stand Up India’ event, the Union Budget presented on Monday left members of the start-up ecosystem in the city disappointed. The Modi Government’s Budget had a few announcements related to boost start-ups which included 100 per cent tax exemption for start-ups for a period of three years.
“No start-ups usually make profit in the first three years. So, the tax exemption for start-ups is not a very exciting announcement,” said Adi Vemuru of Augustfest. “The few start-ups that make profits are not disruptive but will be a part of the servicing industry. We had expected a lot more from the present government but this Budget has only a few things that can benefit a start-up,” he said.
Ravi Korukunda, COO of Purple Talk also feels that the tax benefit is just a feel good factor.
“We were expecting policies around crowd-funding but there was no mention of it in the Budget,” said Mr. Korukunda. “Other developed countries have formulated policies for crowd-funding whereas India is yet to do it. It would have been a big boost to Internet of Things (IoT) and hardware start-ups if the government had formed guidelines for crowd-funding.”
Mr. Vemuru of Augustfest also expressed his disappointment over the government not talking about making of closure of start-ups easier.
“It is really good that the government is helping new companies register in a day but closing a company is a very painful process. Sometimes, it may months or even years to close down a company. We wish, the exit process was made easier,” said Mr. Vemuru. The IT industry leaders felt that the imposition of MAT (Minimum Alternate Tax) was a letdown.
BVR Mohan Reddy, Chairman, NASSCOM said that the “imposition of MAT on start-ups will not allow the full impact of the benefits to be realized,” Ramesh Lohanathan, President, HYSEA (Hyderabad Software Exporters Association) said that he was hoping for more specific measures around start-ups and the imposition of MAT was a dampener.
100 per cent tax exemption for start-ups for a period of three years announced.
From: The Hindu