STOCK MARKET BSE NSE

Government may provide tax incentives for startups in 2020 Budget

Tiger Global-backed tea cafe chain Chaayos founder Nitin Saluja said that there should be less tax on ESOPs.

Published: 30th December 2019 04:15 PM  |   Last Updated: 30th December 2019 04:25 PM   |  A+A-

Budget

Nirmala Sitharaman likely to present the 2020 Budget on February 1.

By PTI

NEW DELHI: The government is expected to provide tax incentives to start-ups in the forthcoming budget to support the growth of budding entrepreneurs, sources said.

The Department for Promotion of Industry and Internal Trade (DPIIT) has suggested several measures to the finance ministry for start-ups in the budget.

The recommendations include an extension of tax incentives to incubators supported under Atal Innovation Mission; reduction in GST (Goods and Services Tax) rates on AIF (alternate investment fund) management fees; and tax benefits on ESOPs, they said.

Start-ups need a talented workforce and ESOPs are one of the best options to attract skilled people as giving just high cash payout add to the burden on cash-starved enterprises, industry players said.

Tiger Global-backed tea cafe chain Chaayos founder Nitin Saluja said that there should be less tax on ESOPs.

"It should attract as little tax as possible. ESOPs are one of the best options for startups at their early stages," Saluja said.

Further fees charged by the fund manager of AIF domiciled in India is liable to 18 per cent GST as it qualifies as a taxable supply.

Sources said that reduction in GST rates will help India to become an investment hub. Startup India initiative of the government aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive to the growth of budding entrepreneurs.

There are 19 components under the Startup India action plan spanning across areas such as simplification and hand-holding, funding support and incentives, and industry-academia partnership and incubation.

So far the department has recognised 26,619 startups.

Of these, maximum was in the IT services space which was followed by healthcare and life sciences, and education.

Finance Minister Nirmala Sitharaman is likely to present the Budget for 2020-21 fiscal on February 1, 2020.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp