Mumbai: The startup community has unanimously welcomed lower corporate tax for enterprises with a turnover of upto Rs 50 crore as well as the move to extend the three-year tax exemption for startups in its first seven years from previously five years.
While the industry expected exemption from Minimum Alternate Tax (MAT), it has accepted the provision to allow MAT credit to be carried forward from 10 years to 15 years as a positive step forward.
Chandni Jafri CEO of Mumbai Angel Network hailed the budget as being overall assertive, and growth oriented.
"The move to reduce the corporate tax to 25 per cent for companies with a turnover of under Rs 50 crore was the biggest highlight of the budget as it covers over 96 per cent of the (startup) landscape currently," she said.
Saurabh Srivastava, co-founder at Indian Angel Network (IAN) also welcomed the positive measures of the budget.
"Profit-linked deduction for startups extended to three of seven years is a good move. We were hoping for MAT to go away but its extension up to 15 years is still satisfactory," Saurabh Srivastava, Co-founder at Indian Angel Network said.
"The ability to carry forward losses if the founder remains involved is a very positive step as is the tax reduction for companies below Rs 25 crore," he added.
However, felt that capital gains for startups should be aligned with listed companies, which was not addressed.
Pranay Bhatia, Partner - Direct Tax, BDO India also agreed that the ability to carry forward losses if the founder remains involved was positive, and said it was in line with the industry expectations.
"Increase in MAT credit entitlement to 15 years will also incentivise credit availability to startups," he added.
Snapdeal CEO Kunal Bahl said, "We commend the focus on growing the digital footprint in the country; enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Adhaar Pay to enable more digital payments are significant measures."
He also welcomed the emphasis on skill development and technical education, saying it would enable India to successfully harness the demographic dividend.
Bipin Preet Singh, the co-founder of payments platform MobiKwik applauded the government's move to reduce corporate tax for Medium and Small Scale Enterprises (MSMEs), as well as the digital push in the budget which "invests heavily in technology and digitisation."
"Reduction in the corporate tax for MSMEs to 25 per cent will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast," he said.
Entrepreneurship network TiE's president Anand Desai, welcomed the move to allow MAT credit to be carried forward for 15 years, and relaxing the tax exemption period for startups. He also pointed out that FIPB being abolished, and easier FDI would be positive for startups.
However, the demand to carve out section 56 of Income Tax Act which taxes angel investments, for startups, was not addressed, and Saurabh Srivastava of IAN pointed out that it could impede the growth of innovative startups and job creation.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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