Start-ups look forward to tax holidays, incentives post Covid blow- The New Indian Express


By Express News Service

BENGALURU: A Rs 1,000 crore package for seed investments in start-ups announced by Prime Minister Narendra Modi earlier this month and other fiscal measures during the pandemic has clearly signalled 
the focus of the government on providing growth impetus to the ecosystem.

However, the stakeholders say that the much-awaited regulatory changes in easing compliance burden, incentivising the domestic and foreign investments  would be the key things to watch out for during the upcoming Budget that is scheduled to be announced on February 1. While the government has placed startups under the priority sector lending status, a regulatory system that addresses the tax parity concerns is the need of the hour. 

According to Neeraj Tyagi- Founder and CEO of We Founder Circle — a  start-up investment platform— the previous budget did not completely address the expectations and requirements of the startup ecosystem.

“There were some misses including working capital crunch, tax parity on capital gains etc. After the Covid- 19 outbreak, start-ups are leading the technology adaptation across the sectors. This has further built an interest among corporates to invest in star-tups and technology-oriented projects. 

Therefore, this is the right time for the government to incentivise the startup funding and work towards 
relaxing the policies to encourage angel investors to invest more. Also, the government needs to push major fund allocation and also lower the GST which currently has narrowed the scope of maneuvering for startups,” said Tyagi.

 Industry experts say that the government should not tax the ESOPs unless they are cashed out besides extending the tax holiday for such initiatives.


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