The budget was anticipated with all the excitement and surely it was nothing less than that. So what were the key points that the startups could take away? Here are a quick few.
- The rate of tax for micro, small and medium enterprises (MSMEs) with turnover of less than USD 7.4 million also has been reduced to 25%. The finance minister said firms incorporated after 31 March 2016 will now be able to avail a three-year tax holiday in the first seven years of their existence. Since most startups take time to make profits, it’s certainly a positive move in the right direction.
- Digital payments will continue to gain momentum as digitising the nation has been one of the top priorities. Post offices and fair price shops (government regulated subsidy outlets) will be used to promote cashless transactions which will allow greater reach to remote areas. The finance minister also announced schemes like rebates and cashback to promote its digital payment app BHIM.
- Though startups wanted the minimum alternate tax (MAT) to be completely scrapped, the government has allowed firms to carry forward MAT for 15 years as opposed to the 10 year period allowed earlier.
- For the purpose of carry forward of losses in respect of start-ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues.
However, one of the biggest disappointment that the health sector was completely ignored and startups are really happy about it. Another thing that surprised the startup industry was the fact that the budget gave no clarity on GST implementation, which was one of the measures that startup industry had set its eyes on. Most of the startups felt that received very less and were expecting some radical changes this year. Only time will tell so.
— Team SoS