No gain, without pain is the verdict from startups and investors on tax measures unveiled in the Budget. Income tax rebates for startups have been extended for three out of the first seven years since incorporation.
The industry is cheering the move to allow startups -certified under the IT Act or those established after April 2016 -to carry forward losses so long as the promoters retain their holding in the company, without the earlier stipulation to maintain a 51% stake.
“The government has recognised that conditions which come in the way of capital flow into businesses must be disbanded,” said Neelesh Talathi, CFO, Pepperfry. Also companies with a turnover below Rs 50 crore are now liable to pay tax of 25% from the earlier level of 30%, a measure on par with global standards. There were disappointments too. The finance minister has allowed minimum alternate tax to be carried forward for 15 years instead of the current 10 years but investors had sought an exemption.
Big blow comes from there being no change in the equalisation levy, where firms have to cough up a 6% tax for online advertising. “This is neither Income Tax nor GST, but an addition to them”, said tax expert Nishith Desai.
Source: The Economic Times
