Finance Minister Arun Jaitley today proposed extending the time period for availing tax benefit for startups to three years in the first seven years of existence, which could be termed as a big relief to start-ups. On this note, CEO and Founder of cab aggregation company Aaveg, Ashok Vashist said that Union budget 2017 looks supportive towards startups. In his take on budgetary proposals Vashist said, “With the profit linked deductions for startups reduced to 3, it becomes a healthy scenario for investors who earlier had their investments stuck for 7 years. More funding opportunities will uplift the entire startups ecosystem.”
In the view of allocation of Rs 2.41 lakh crore in transport sector, Vashist stated his satisfaction and said that this will help in reshaping the transportation fraternity on the whole. “We can also hope that private sector will now gain investors trust in the mobility segment,” he added.
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Jaitley in his budget speech stated that for the purpose of carry forward of losses in start-ups, the condition of continuous holding of 51 per cent of voting rights has been relaxed. However, this is subject to the condition that the holding of the original promoter/promoters continues. This comes as a relief to startups as they do not make profits in the first few years of operations. On the issue of removal of Minimum Alternate Tax (MAT), the Finance Minister said “it is not practical to remove or reduce MAT at present.” Besides, the Minister has proposed to reduce the income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent, in order to make micro, small and medium enterprises (MSMEs) more viable and also to encourage firms to migrate to company format.
(With inputs by agencies)