SEVEN-YEAR HITCH Star­tups Get More Time to Choose Their 3-year Tax Hol­i­day

Tax re­bates ex­tended for 3 out of first 7 years

The Economic Times - - Front Page - Our Bu­reaus

Mum­bai|Ahmed­abad|NewDelhi: No gain, with­out pain is the verdict from star­tups and in­vestors on tax mea­sures un­veiled in the Bud­get. In­come tax re­bates for star­tups have beenex­tend­ed­forthree­out­ofthe­first seven years since in­cor­po­ra­tion.

Thein­dus­tryis­cheer­ingth­e­moveto al­low star­tups — cer­ti­fied un­der the ITAc­torthoseestab­lishedafterApril 2016—to­car­ry­for­ward­losses­so­long 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 ₹ 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. FM 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.

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