Referring to startups in her Budget speech, the Finance Minister said that several measures were planned to increase the base for the knowledge-driven enterprises. "To boost startups, tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest," she said.
India is home to the world's third largest start-up ecosystem. Under the Start-Up India campaign, recognition has been accorded to 27,000 new startups in the country. In their reaction to today's budget, here's what the industrialists think-
Archit Gupta, Founder, and CEO, ClearTax
The complex tax regime for taxpayers with the slabs rejig. With the optional new regime, taxpayers will have to evaluate what works better. Those committed to long term saving and investing via 80C may be discouraged and this may likely demotivate taxpayers from tax-saving linked investing.
DDT removal is good as it increases dividends received in the hands of the taxpayer - however, such receipts to now are taxable in their hands. Those above 20% tax slab - will now face more tax on their dividend income.
We welcome deferment of perquisite taxation - now taxation at the time of 'exercise' deferred to 5 years or till they leave the company or till they sell their shares - whichever is earlier. This will be a key plank for hiring quality resources.
Raising the turnover threshold for audit for businesses to Rs 5Cr is a welcome relief. Hopefully, tax filing for such businesses will also be simplified. However, such businesses will have to be careful with keeping cash transactions under 5% and will need a technology-based mechanism to track that.
Rohit Shelatkar, Founder of Vision World Films
This may be a great move if we manage to develop and support more entrepreneurs in India. Entrepreneurship built markets, boost economies, provide employment and benefits not only the entrepreneurs themselves but also related business and consumers through the innovative products and services. It will also encourage direct foreign funding coming into India.
Yogesh Bhatia, Founder, and CEO, Detel
We welcome the initiatives announced by the honorable Finance Minister to boost the start-up ecosystem. The measures made by the government will encourage fresh investment in the sector because the proposed scheme is set to focus on encouraging the manufacturing of mobile phones and electrical products. The government planned to reveal more of a detailed scheme to boost mobile phone, electronics products in the country and to initiate more of phones and electronics to be Made in India soon. We are glad for this opportunity that the government has taken and it encourages us to scale up our defined mission of connecting40croreIndians.
Farshid Cooper, MD, Spenta Corporation
The most telling thing to come out of Budget 2020 is the tax relief to individuals. The amended tax slabs will ensure more disposable income in the hands of the middle class. This could lead to reviving the consumption cycle in the realty sector and kickstarting the economy. Further, with additional savings, individual investments in housing, especially affordable housing could see an uptick in the near future.
Deepak Mittal, CEO & Co-founder, TO THE NEW
Being the first budget of the decade, this budget holds immense value & importance and we are glad to see the government’s continued commitment towards positioning India a digital hub and fostering emerging technologies.
We are thrilled with the announcement of a soon to be rolled out policy to enable private sector to build data center parks throughout the country. This would reap benefits such as on-demand access to ICT infrastructure, cater to Indian regulatory requirements as well as drive scalability for businesses in India. We were, however, also expecting the government to announce measures with respect to Data Protection keeping in mind the amount of Data being created and stored at unprecedented rates.
Moreover, the government’s move to set up an Investment Clearance Cell for entrepreneurs to offer assistance in funding, will certainly encourage more start-ups to set up their businesses in India. This will, in turn, lead to the growth of the Indian economy. With a slew of growth measures announced, the emphasis of the government is very clear on the overall economic development.
Neel Juriasingani, CEO & Co-founder, Datacultr
As per our expectations, the budget 2020 is much focused on driving financial inclusion in the country and the initiative to provide digital connectivity to all public institutions at Gram Panchayat level is a key step to support the same. We are glad that the honorable Finance Minister has announced a series of major policies in the budget which will give a push to emerging technology companies in India. Moreover, this budget has addressed the importance of Analytics, IoT and AI with the government planning to set up data center parks throughout the country which will enhance the whole ecosystem.
We are happy that the budget has given much-required push on creating more opportunities for entrepreneurs. The setting up of investment clearance cell which will offer assistance in funding is a welcome move to boost the start-up ecosystem in India. We look forward to this and to the Government marking progress against it