Union Budget 2021 | Start-ups to get tax holiday till March 2022


Budget proposes to incentivise One Person Companies by removing curbs on paid-up capital, turnover

The Union Budget proposes to extend tax holiday for start-ups until the end of March next year. It also proposes to extend the capital gains exemption for investment in start-ups by another year, to encourage funding in the sector.

โ€œI propose to extend the eligibility for claiming tax holiday for start-ups by one more year. Further, to incentivise funding of the start-ups, the budget proposes to extend the capital gains exemption for investment in start-ups by one more year,โ€ said Finance Minister Nirmala Sitaraman while presenting the Union Budget on Monday.

The budget also proposes to incentivise One Person Companies (OPCs) by allowing them to grow without any restrictions on paid-up capital and turnover. OPCs will also be allowed to change the โ€˜typeโ€™ of the company at any time. Also, the residency limit has been brought down to 120 days from 182 days, making investments in India more convenient to NRIs.

Ashish Aggarwal, senior director and head, policy advocacy at Nasscom, said most of these start-up announcements were only incremental and not inclusive in nature.

โ€œFor example, the proposed one-year tax holiday will be available only to some 400 start-ups in the country, that are recognised as well as certified by the Department for Promotion of Industry and Internal Trade [DPIIT]. However, we have over 40,000 start-ups which are recognised but not certified and therefore wonโ€™t benefit from this tax relief,โ€ he explained.

The apex body had, in fact, recommended the Finance Ministry to include DPIIT certified companies under this benefit, but the budget doesnโ€™t reflect that.

Increasing the paid up capital limit from โ‚น50 lakh to โ‚น2 crore and turnover from โ‚น2 crore to โ‚น20 crore would certainly help start-ups in terms of easing pressure on reporting compliance, Mr. Aggarwal added.

Rajesh Nambiar, Chairman and Managing Director-India, Cognizant, said reducing the time limit for reopening of assessment to three years, setting up a faceless income tax appellate tribunal, and strengthening the NCLT with e-courts and a conciliation mechanism for contractual disputes would increase investor confidence in the country.

You have reached your limit for free articles this month.

Subscription Benefits Include

Today’s Paper

Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.

Unlimited Access

Enjoy reading as many articles as you wish without any limitations.

Personalised recommendations

A select list of articles that match your interests and tastes.

Faster pages

Move smoothly between articles as our pages load instantly.

Dashboard

A one-stop-shop for seeing the latest updates, and managing your preferences.

Briefing

We brief you on the latest and most important developments, three times a day.

Support Quality Journalism.

*Our Digital Subscription plans do not currently include the e-paper, crossword and print.

.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *